Mobile-Home Park Residents Vulnerable as Corporations Acquire, Squeezing for Profits

Residents living in mobile parks around the country are experiencing a worrying trend, according to housing advocates. There is a generation of park owners retiring and wanting to sell their properties. These parks are being snapped up by investors and corporations.

According to reports, these companies increase the fees and rentals for the land beneath the houses, and evict those who cannot pay. Mobile home park residents are particularly vulnerable to losing their houses in this way. The older homes are physically incapable of being relocated to another park. Even if it is possible, it would cost the resident almost $5,000, the kind of money that most of them do not have.

Mobile-home parks or manufactured-housing communities, are an essential source of low-income housing. There is a recent trend of them being purchased by financial investors who take advantage of the lack of regulations in many states to exploit their tenants. Vacating tenants from mobile parks is easy – residents who are unable to pay their rent are compelled to vacate their mobile homes.

According to several industry insiders, when a firm raises the rentals and fees in a park, it boosts cash flow and makes the park more valuable on paper. As a result, the business can borrow more money against the property.

The process is similar to refinancing the home and taking cash out with a new mortgage if the value has increased. So, the corporation takes a new loan and restarts the cycle at a different mobile home park, potentially displacing even more of the country’s poorest residents.

There is a cascade of borrowed funds being utilized to purchase mobile home parks. To top it all, the interest is very low; and the loans are insured by government-backed organizations of the U.S. mortgage market, Freddie Mac and Fannie Mae.

According to economist and president of the nonprofit Lincoln Institute of Land Policy, George McCarthy, Fannie Mae and Freddie Mac should stop providing low-interest loans to investors buying up mobile home parks unless they demand significantly better safeguards and “figure out a path that preserves communities and protects residents.”

Assistance from Fannie and Freddie would be extremely useful for park residents who retire. They could help in backing low-interest loans to these people to assist them in purchasing their own parks and forming co-ops.

On the other hand, Freddie Mac has reportedly stated that recently they have working towards offering protection for mobile home parks tenants and that they are “committed to supporting resident-owned communities.”

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