The right financing can matter as much as the purchase price. Loan programs differ in who they lend to, what properties qualify, how long the money is fixed and how hard it is to pay off early. Rates and program rules change often, so treat this as orientation and confirm current terms with lenders.
How lenders look at a park
Most commercial lenders size a loan using a few core measures:
- Loan-to-value (LTV): the loan as a share of the appraised value. The rest is your equity.
- Debt service coverage ratio (DSCR): net operating income divided by annual loan payments. Lenders set a minimum, so DSCR often limits loan size more than LTV does when rates are high.
- Property profile: occupancy history, share of park-owned homes, utilities (municipal vs. private), condition and location.
- Sponsor: your net worth, liquidity, credit and experience owning or operating similar properties.
You can test DSCR and cash-on-cash scenarios in the Investment Calculator.
Agency loans (Fannie Mae & Freddie Mac)
Fannie Mae and Freddie Mac both have multifamily programs for manufactured housing communities, offered through approved lenders. These loans are generally aimed at stabilized communities with solid occupancy, experienced sponsors and acceptable infrastructure. They are known for long terms, fixed-rate options and, typically, non-recourse structures with standard carve-outs.
Trade-offs include a more involved underwriting and closing process, third-party reports and prepayment terms such as yield maintenance or defeasance that can make early payoff costly. Both agencies have offered pricing incentives for communities that adopt certain resident protections in their leases. Agency MHC programs focus on manufactured housing communities; properties that are mainly RV or transient sites generally look elsewhere.
Banks, credit unions, SBA and CMBS
Local and regional banks, credit unions
Relationship lenders finance many smaller and value-add parks. Terms are often shorter (a fixed period with a longer amortization), frequently with personal recourse. They can be more flexible on property size, occupancy or a business plan, and may fund improvements.
SBA programs
SBA 7(a) and 504 loans are designed for operating businesses. RV parks and campgrounds that are actively operated may qualify, while communities treated as passive real estate investments often do not. Eligibility depends on the specifics, so ask an SBA lender early.
CMBS (conduit) loans
CMBS loans are pooled and sold to bond investors. They can work for a range of property types, including some RV resorts, and are typically non-recourse with fixed terms. Because the loan is administered by a servicer, changes after closing (such as releasing land or assuming the loan) follow a formal process, and prepayment usually involves defeasance or yield maintenance.
Seller financing terms explained
With seller financing, the seller acts as the lender for part of the price and the buyer makes payments to the seller, usually secured by a note and mortgage or deed of trust. It is common with smaller parks and properties that are harder to finance, and can be combined with a bank loan. The key terms:
- Down payment: the cash the buyer pays at closing. A larger down payment lowers the seller’s risk.
- Interest rate: negotiated between the parties, and sometimes different from bank rates in either direction.
- Amortization: the schedule used to calculate payments. A longer amortization means lower payments and slower principal paydown.
- Term and balloon: the note is often due before it fully amortizes. The remaining balance, the balloon, is paid at that date, usually by refinancing or selling.
- Other provisions: prepayment rights, default remedies, whether the note can be assumed, and whether the seller’s note is subordinate to a bank loan.
On ParkMarket, sellers can mark a listing as offering seller financing and choose whether to publish the terms. Browse seller-financed listings to see what is available.
Assumable debt
Some existing loans can be taken over by a buyer with the lender’s approval. When the existing rate is below today’s market, assuming it can improve cash flow. Expect an application, a review of the buyer’s finances and experience, assumption fees and legal costs.
The main challenge is the equity gap: the difference between the price and the loan balance must be covered with cash, a second loan where the senior lender allows it, or seller financing. Listings with assumable debt are tagged so buyers can filter for them.
1031 exchange basics
A Section 1031 like-kind exchange lets an investor defer capital gains tax by selling investment or business real property and reinvesting in other like-kind real property. A few rules shape most exchanges:
- Proceeds are held by a qualified intermediary, not by the seller.
- Replacement property must be identified within 45 days of the sale.
- The purchase must close within 180 days of the sale (or the tax filing deadline, if earlier).
- Cash or debt relief not reinvested (“boot”) may be taxable.
One wrinkle specific to this asset class: homes titled as personal property, such as some park-owned homes, may not qualify as like-kind real property. Work with a qualified intermediary and tax advisor before you sell, not after. Buyers on an exchange timeline can note it in their buy box, and listings that work for exchanges can be tagged.
Choosing a path
- Stabilized, larger community: compare agency and CMBS quotes, and weigh prepayment flexibility against rate and term.
- Smaller or value-add park: start with local banks and credit unions, and ask whether the seller will carry part of the price.
- Operating RV park or campground: talk to bank and SBA lenders that know hospitality-style income, and to CMBS lenders for larger resorts.
- Existing low-rate loan: evaluate an assumption alongside new debt.
Educational content only. This is general information, not legal, tax, lending or investment advice. Every property and buyer is different; consult qualified professionals before making decisions.