Manufactured Housing Community Feasibility Studies: Infill, Chattel Credit, and Why SBA Is the Wrong Question

A manufactured housing community feasibility study has to prove something narrower than most sponsors expect, and something wider than most studies deliver.

Narrower, because demand is not in doubt. The affordable housing shortage is the most thoroughly documented condition in American real estate, community supply has been contracting for decades, and no serious analyst needs a market study to establish that people want cheap housing. A study that spends thirty pages proving demand exists has proved the one thing nobody disputes.

Wider, because the questions that actually decide an MHC credit sit outside the demand analysis entirely. Can the vacant sites be filled, given that filling a site requires a home and a home requires a buyer who can obtain financing on terms that exist? What does the private wastewater plant cost to replace, and when? Does the rent increase programme survive contact with a state legislature? And, since lot rent is rental income from real property, is this transaction even eligible for the loan programme the sponsor has assumed?

That last question deserves an early answer because it reframes everything after it. Manufactured housing communities are, in the general case, not SBA financeable. SBA excludes businesses primarily engaged in owning real property and leasing it, and a land-lease community collecting ground rent is close to the paradigm case. The routing question for this asset class is therefore answered on a different map from every other asset class on this site, and the map is agency debt with tenant protections attached to it.

This article sets out the feasibility half. How the trade area and the addressable household pool are built. Why the demand arithmetic has a financing gate in the middle of it that most studies omit. How the revenue build works when infill is a capital project rather than a leasing exercise. Which cost lines operators understate. How coverage is tested. And what the actual programme routing looks like once SBA is off the table.

It then carries the appraisal analysis as the supporting half, because the ownership structure that makes this asset class unusual to underwrite makes it equally unusual to value.

What the study has to prove

Can the vacant sites be filled, and at what cost? Not whether there is demand for affordable housing. Whether there are households in the trade area who can be approved for a home loan, and what it costs the community to put a home on a site if they cannot.

Does the revenue build survive the utility structure? Lot rent multiplied by occupied sites is the easy part. Utility recapture, the timing lag between cost increases and recovery, and the capital obligation of a private system are where the number moves.

Is the rent programme lawful and durable? The value-add thesis in almost every MHC acquisition is closing a gap to market rents. That thesis is a regulatory bet as much as a market one.

Does it cover under the definition that applies, and with a reserve that reflects the infrastructure? A community on a private wastewater plant carries a component obligation that a per-site reserve rule of thumb does not fund.

The finding that changes the underwriting: demand is not the constraint

Here is the arithmetic that most MHC feasibility studies never run, and it inverts the conclusion.

Start with the trade area and build the addressable pool the ordinary way:

Against, say, 380 vacant sites across the competitive set. Demand exceeds available supply by roughly fifteen to one. On that showing, infill is trivial and the study recommends the deal without qualification.

Now insert the step the analysis is missing. A household cannot occupy a site without a home, and in a tenant-owned-home community the household buys the home. Manufactured homes on leased land are generally titled as personal property, so the purchase is financed with a chattel loan rather than a mortgage. Chattel credit is a smaller market, with fewer lenders, tighter credit standards and materially higher rates than mortgage lending.

Still comfortably above 380 vacant sites. So why do communities routinely report filling one or two sites a month?

Because the pool is not a queue. Each fill requires a specific household that wants this community, at this rent, at this moment, and that clears underwriting. The chattel approval funnel converts a large pool into a thin monthly flow, and the flow rate, not the pool size, is what a lease-up schedule needs.

The practical instruction: the absorption assumption in an MHC feasibility study must be evidenced from actual fill rates at comparable communities, not derived from the size of the demand pool. A study that reaches an absorption number by dividing addressable households by vacant sites has produced a ratio, not a forecast.

The same constraint shows up in the affordability case

Run the total monthly cost comparison that carries the demand argument:

*Illustrative, and rates must be calibrated to the subject market and the current chattel market.*

Look at what that shows. Against a site-built starter home the advantage is decisive. Against a Class C apartment it is roughly a wash on monthly cost, and the MHC household is paying that to acquire a depreciating asset on land they do not own.

The MHC value proposition against its nearest competitor is therefore not raw monthly savings. It is a fixed housing cost that does not reset annually, plus whatever equity the home retains. Both are real, and neither is what a study asserting "affordability" usually means.

And the arithmetic swings on one line. At mortgage pricing rather than chattel pricing, the home payment falls substantially and MHC becomes decisively cheaper than the apartment. The demand case for this asset class is, to a significant degree, a function of the chattel credit market. Which means a feasibility study that models tenant demand without modelling home finance has mis-specified its own thesis, and a shift in chattel availability is a demand-side sensitivity, not a footnote.

This also explains the sector's structural puzzle: overwhelming housing need, contracting supply, and communities that still cannot fill their vacant sites quickly.

Market and demand analysis

Defining the trade area

MHC trade areas are drawn on employment and wage geography rather than on amenity geography.

All-age workforce communities. The catchment is the drive shed to the employment centres paying in the target wage band: distribution, manufacturing, healthcare support, hospitality, construction, retail. Typically a 15 to 25 minute commute, because the resident base is commuting daily in a vehicle whose running cost matters. School district quality is a real factor where the community houses families.

Age-restricted communities. A different and usually wider catchment, since the resident is not commuting. Proximity to healthcare, retail and family, plus climate. The demand denominator is households aged 55 and over in the income band rather than the workforce.

Seasonal and snowbird communities, concentrated in Florida, Arizona, Texas and the Gulf. These have no local trade area worth the name. Demand originates in northern states and Canada, so the analysis runs off migration patterns and the competitive set is other seasonal destinations, not the community across town. Revenue is seasonal, occupancy is measured differently, and many of these operate as MH and RV hybrids.

Draw the wrong one and the study measures the wrong population.

Quantifying demand from the ground up

Four steps.

Step one: trade area households, not population. The unit of demand is a household because the unit of consumption is a site.

Step two: screen to the income band. The MHC resident sits in a band that is real and reasonably narrow: above the income at which subsidised housing is the alternative, and below the income at which a site-built home becomes attainable. Build the band from local wages and local house prices rather than from a national rule, because the upper bound moves with the local starter-home market. In an expensive metro the band is wide; in a cheap one it can nearly close.

Step three: subtract those already housed in the competitive set, and those who can qualify for a site-built home.

Step four: apply the financing gate, as above. This is the step that distinguishes a usable study.

Add, for the seasonal segment, an entirely separate demand build off migration and competitive destination supply.

Competitive supply and the pipeline

Community and site counts should be built from the sector's own datasets rather than from general commercial databases, which cover this asset class poorly.

The supply story has three moving parts and they all point the same way.

Almost no new communities are being entitled. Local zoning excludes manufactured housing from most residential districts, minimum lot sizes and design standards make it infeasible where it is permitted, and community opposition is reliable. A handful of states have moved to restrict local exclusion, and where that has happened it is worth checking whether it has produced any actual new supply or merely removed one barrier among several.

Existing communities are being lost to closure and redevelopment, particularly where land value under the community exceeds its income value. This is the same dynamic that removes marina capacity, and it has the same effect: it makes the remaining stock more valuable and it is the single most supportive fact a projection can carry when it is happening in the subject's own trade area.

Institutional consolidation has changed the competitive set. The sector moved from fragmented private ownership to one where the largest owners are public REITs and private equity. For a feasibility study this matters in a specific way: a new entrant or a value-add buyer is now competing against operators who price to market systematically. The days when a trade area contained several communities charging 1998 rents because nobody had thought about it are largely gone, and a study premised on finding one should show its evidence.

For lot rent and occupancy at the community level, the sector-specific source is the JLT Market Reports series published by Datacomp, which surveys individual communities across major MHC markets and reports rent, occupancy and community characteristics. It is the dataset that does the work here and it is not something a generalist competitor will have.

Capture and penetration

Capture for an existing community with vacancy is not a market share question. It is an absorption question, and it should be expressed as sites per month with the constraint identified.

For a new community, or a major expansion, capture is genuinely a share question, and the honest version of it accounts for the fact that a household choosing an MHC is choosing a home purchase as well as a housing location. Switching costs run in both directions: high once in place, but also high on entry, because entry requires buying a home.

The revenue build

Lot rent

Occupied sites multiplied by market rent, which is the sector's cleanest revenue line. On a hundred-site community with 88 occupied sites at $475 monthly, that is roughly $501,600 annually.

The judgment is not the arithmetic, it is the rent position. Where in-place rents sit within roughly 10% to 15% of comparable market rates, the community has modest upside achievable without aggressive increases that trigger turnover or collection problems. Where the gap is much wider, the upside is larger and so is the execution risk.

Current underwriting practice builds rent growth of roughly 3% to 4% annually.

The feasibility-side addition to that appraisal judgment is a collections and turnover test on the increase programme. Relocating a home is expensive, which is what gives the operator pricing power, but it also means a resident who cannot pay does not leave quietly. They stay, they fall behind, and the community acquires an abandoned home and a legal process. Model the increase programme with a bad debt assumption that moves with the size of the increase, rather than holding bad debt flat while rents rise.

Utility recapture

Sub-metering water and billing residents for consumption converts a landlord expense into a pass-through, and it is one of the sector's most common value-add levers. A community without sub-metering has upside; one that already sub-meters has already captured it.

Two modelling disciplines. First, do not double count: the benefit appears either as an expense reduction or as recapture income, not both. Second, model the lag. Utility rates rise on the provider's schedule and recapture adjusts on the community's, so in a rising-cost period the community carries the difference. Over a five-year hold in a market with escalating water rates, that lag is a real number.

Park-owned home income

Modelled entirely separately, for the reasons the appraisal section sets out. Home rent is income attributable to personal property, and it carries maintenance, turnover, capital replacement and collections that lot rent does not.

The feasibility question on POH is directional: is the plan to keep renting homes, or to sell them to residents and convert to a tenant-owned structure? Those are different businesses with different capital requirements and different exit multiples, and the study should model whichever one the sponsor is actually going to run.

Home sales, and infill as a capital project

This is the line that most distinguishes an MHC pro forma from a multifamily one, and it is usually modelled as though it were leasing.

Filling a vacant site costs money before it earns any. Either a resident brings a home, which requires a resident who already owns one and will pay to move it, or the community buys and places one. The second is the realistic path in most infill programmes, and the all-in cost includes the home, transport, set, foundation or piers, skirting, steps, HVAC, and utility connection.

So the correct treatment is a capital budget with a return calculation attached:

• Capital deployed per site filled
• Incremental annual lot rent, less incremental operating cost
• Simple return on the capital
• Recovery of capital if the home is subsequently sold to the resident, and the timing of that sale

Run that way, infill either clears the sponsor's cost of capital or it does not, and the answer varies enormously with lot rent. At $475 lot rent, an all-in fill cost in the tens of thousands takes years to return. At $900 lot rent it is a straightforwardly good project. The infill thesis is rent-dependent, and a study that presents infill as free lease-up has hidden the largest capital item in the plan.

Ancillary

Storage, pet fees, late fees, laundry, cable. Modest, but they are the lines that make the difference between a 60% and 62% margin, and they are usually underexploited at the kind of community that comes to market.

Ramp, absorption and seasonality

Absorption is sites per month, evidenced from comparable community fill rates and gated by chattel approvals as set out above. Model it monthly, because an infill programme has a capital outflow ahead of each revenue inflow and the cumulative capital requirement peaks well before stabilisation.

Seasonality is minimal at conventional communities, which is one of the sector's genuine attractions: lot rent arrives in February as reliably as in July. Seasonal and snowbird communities are the exception and should be modelled monthly like any other seasonal asset.

Cost structure: the lines operators understate

Private water and wastewater. The largest single risk in the asset class and the one the existing appraisal analysis on this site correctly identifies as the principal value driver. On the feasibility side the question is arithmetic rather than descriptive: what does the package treatment plant, the well, the septic fields or the lift stations cost to replace, when, and is connection to municipal service available at what cost? A community whose plant is at end of life has a capital event on the horizon that no operating pro forma shows.

Roads. Private, resident-facing, and expensive to rebuild. Deferred road work is the most visible form of deferred maintenance and the easiest to cost.

Property tax reassessment on sale. The projection uses the seller's assessment. Reassessment can move the largest single expense line materially, and in states with acquisition-value assessment it moves it immediately.

Insurance. Wind exposure in Florida and the Gulf has made this a step-change line rather than an inflation line, and manufactured housing carries a wind risk profile that underwriters price accordingly. Stress the renewal rather than trending the premium.

Management fee. Normalise it. Owner-operated communities frequently show no fee, and the buyer will pay one.

Bad debt and collections, weighted to park-owned homes and to any aggressive increase programme.

Utility cost inflation and the recapture lag, as above.

Compliance. State manufactured housing community licensing, health department oversight where the community operates its own water or wastewater, and the reporting that goes with being a regulated utility operator in all but name.

Replacement reserves

A per-site reserve figure is the sector convention and it is usually too low for a community on private utilities, because it was calibrated on communities that are not.

Build the schedule:

Annualise it. Where an agency lender is escrowing a reserve, compare the escrow to the component schedule rather than treating the escrow as the answer, because the escrow is a loan condition and the schedule is the obligation.

Coverage and sensitivity

The coverage tests that apply

Agency lenders set minimum coverage for MHC loans and the level moves with leverage, term and market tier.

Under USDA's rule at 7 CFR Part 5001, replacement capital expenditure is deducted from EBITDA before the coverage ratio is taken. For MHC on private utilities that deduction is large.

*Illustrative. A community on municipal water and sewer would show a much smaller gap, which is precisely the point: the utility structure moves the coverage ratio, not merely the risk narrative.*

Sensitivities that mean something for MHC

Rent regulation arriving mid-hold. Not a percentage. Model the value-add rent programme being capped in year two by state or local action. Several jurisdictions regulate MHC rents and the legislative environment has been active as the sector has attracted institutional capital and political attention. Where the acquisition thesis is closing a rent gap, this is the thesis risk and it belongs in the base sensitivity set.

Chattel credit tightening. A demand-side sensitivity unique to this asset class. Model the infill absorption rate falling by half because approval standards tighten or rates move, and hold everything else constant. If the deal only works on the infill schedule, this test is the deal.

Utility system failure or forced connection. A capital event with a regulatory trigger rather than a probability. Model the plant replacement and the municipal connection alternative side by side.

Insurance renewal at a multiple, in wind-exposed states.

Collections deterioration under the increase programme, with bad debt scaling to the size of the increase rather than held flat.

Occupancy at entry. Investor preference concentrates above 85% to 90% occupancy, with communities at 95% and near market rents drawing the tightest pricing. Test the deal at the occupancy it has, not the occupancy it plans.

Break-even stated as occupied sites

The most useful single output: the community covers at 1.00 times with 71 of its 100 sites occupied at current rent, and at 1.25 times with 84. That is a number an operator can check against the rent roll on the first of the month.

State it at current rent, not at the projected rent, so it measures the property rather than the plan.

Programme routing, which works differently here

This is the section that inverts relative to every other asset class in this series.

SBA 7(a) and SBA 504: generally unavailable. SBA excludes businesses primarily engaged in owning real property and leasing it to others. A land-lease community whose income is ground rent falls squarely within that description, and sponsors who arrive expecting an SBA route usually leave without one. There are adjacent structures worth examining with counsel, and the analysis turns on whether the borrower provides services substantial enough to change the characterisation, but the default answer is no.

This matters for a reason beyond routing. Because SBA is generally out, the third-party feasibility requirement that drives so much of this work in other asset classes does not arrive through the SBA door here. It arrives through the agency and conventional underwriting process instead, and through the sponsor's own need to size an infill programme.

Fannie Mae and Freddie Mac. Both operate dedicated manufactured housing community loan products, and both attach tenant site lease protections to their MHC lending, either as a requirement or as a pricing incentive. The protections typically address lease term, renewal, notice of rent increases, the right to sell the home in place, and the right to sublease or assign. This is unusual and it is underwriting-relevant: the agency lender is imposing terms on the borrower's relationship with its residents, and those terms can constrain the value-add programme the acquisition was underwritten on. A feasibility study should model the rent and turnover assumptions against the lease protections that will actually apply, not against an unconstrained plan.

USDA Business and Industry under 7 CFR Part 5001. Available where the community sits in a rural area under the population threshold, which is a great many communities. The stricter coverage definition applies, as above.

Resident-owned community conversion. A distinct route in which the residents collectively purchase the community, financed through specialist non-profit and CDFI lenders. Several states have enacted opportunity-to-purchase laws giving residents a right of first refusal or a notice period when a community is offered for sale. This is a live diligence item for any acquisition in those states, because it can affect timing and certainty of close, and it is a genuine alternative exit.

FHA. Title I and Title II programmes touch manufactured housing on the home side rather than the community side, and their terms bear directly on the chattel financing constraint discussed above. Worth tracking because a change here changes the infill absorption assumption.

Conventional and bridge. Where the community does not fit an agency box, whether for occupancy, utility structure, POH concentration or size. Terms are tighter and the lender will want the infrastructure report.

Where MHC projects fail

The infill programme stalls on financing, not demand. Sites sit empty in a market with an evidenced housing shortage because the buyers cannot be approved. The most common and least anticipated failure.

The private utility system fails or is condemned. A capital event the operating pro forma never contemplated, sometimes with a municipal connection cost attached.

Rent regulation arrives mid-hold. The value-add thesis is capped by statute and the exit multiple compresses with it.

Collections deteriorate under the increase programme. Residents cannot afford the increase and cannot afford to leave, so the community accumulates arrears and abandoned homes rather than turnover.

Park-owned homes consume the margin. The expense ratio drifts from the low thirties toward the high fifties as the POH count rises, and the buyer who modelled a TOH community is operating a POH one.

Reassessment on sale. The largest expense line moves and nobody modelled it.

Insurance withdrawal in a wind-exposed state, leaving the community under-covered or uninsurable at the modelled cost.

Political and reputational exposure. Institutional ownership of affordable housing attracts attention that other asset classes do not, and that attention has a track record of turning into legislation.

The infrastructure was never assessed. Which is where the appraisal takes over.

What the appraisal will test

The feasibility study establishes whether the plan works. The appraisal establishes what the asset is worth, and here the two share an unusual amount of ground because the same structural features drive both.

The ownership structure that changes everything

In most commercial residential property, the landlord owns the building and rents units. In a manufactured housing community, the fundamental relationship is inverted: the resident owns the home and leases the site.

That has consequences running through the entire valuation. The income stream is ground rent: lot rent for a site with utility connections, access and community amenities, not rent for a dwelling. The landlord's capital obligation is infrastructure, not units: roads, water and sewer distribution, electrical service, drainage, common facilities.

Turnover is structurally low. Relocating a manufactured home costs thousands of dollars and carries real risk of damage. A resident dissatisfied with a rent increase faces a far higher exit cost than an apartment tenant does, which produces both stable occupancy and, in the right circumstances, genuine pricing power.

Supply is effectively fixed. New community entitlement is rare in most jurisdictions, the zoning is difficult to obtain and politically contested. Combined with persistent affordable housing demand, that scarcity underpins the sector's fundamentals and explains why national cap rates have compressed toward roughly 5.9% in early 2026, down about 40 basis points from late 2024, against national multifamily averaging around 5.2%.

Tenant-owned versus park-owned homes

This is the distinction that most affects both value and the analytical approach, and it is measurable.

Tenant-owned home communities run operating expense ratios of roughly 30% to 35%. The community collects lot rent and maintains infrastructure. It does not repair roofs, replace water heaters or turn units.

Park-owned home communities run 55% to 65%. The community is now a landlord of dwellings as well as sites, with maintenance, turnover, capital replacement and collections on each home.

That difference, nearly double, is why TOH-dominant communities trade at materially tighter capitalisation rates. A buyer is acquiring a simpler, cheaper-to-run business with less capital exposure.

The appraisal consequence goes beyond the expense line. Park-owned homes are generally personal property, not real estate. They are chattel: titled, depreciating, and frequently financed separately. Including home rent in the income stream capitalised as real property value conflates two different assets.

The defensible treatment is to separate the components: lot rent as real property income, home rent as income attributable to personal property, with the homes themselves valued as a separate asset on an appropriate premise. Where the assignment requires a going-concern allocation, that separation is not optional.

Conversion from POH to TOH is a recognised value-add strategy. Selling the homes to residents converts a high-expense rental operation into a low-expense ground lease. An appraisal reflecting a completed conversion that has not happened is projecting a business plan.

Utility infrastructure: the largest single value driver

If one physical characteristic determines a community's capitalisation rate, it is how water and sewer are delivered.

Municipal water and sewer command lower, tighter cap rates. The community distributes utilities it purchases, the regulatory burden sits with the municipality, and the capital risk is limited to the distribution system.

Private well and septic systems add operational risk and discount valuations, sometimes significantly. The community becomes a regulated utility operator with testing obligations, compliance exposure, and eventual replacement liability for a treatment plant or drain field.

Wells, septic systems, private roads and ageing utilities are consistently identified as the items that erode returns fastest in this asset class, and infrastructure assessment alongside Phase I environmental work is standard pre-acquisition practice.

For the appraiser, three things follow. The utility structure belongs prominently in the property description and in the capitalisation rate justification, not buried in a site description. Deferred infrastructure capital must be quantified, not noted: a community with a failing septic field or a distribution system at end of life carries a near-term obligation that reduces value directly. And utility recapture is real income and should be modelled.

The expense ratio as a diagnostic

Well-run communities operate at roughly 35% to 45% expense ratios, with the TOH and POH sub-ranges noted above.

A ratio outside that range should prompt a question in both directions, and this is a genuinely useful two-sided test.

Higher than expected may indicate management inefficiency, which is upside, or may indicate a POH-heavy operation, private utilities, or a community carrying costs a competent operator would not.

Lower than expected is the more concerning signal. It frequently means deferred maintenance rather than efficiency. An owner-operator performing repairs personally, deferring road and infrastructure work, and carrying no reserve produces an expense ratio that looks excellent and a property that is depreciating.

Normalisation is therefore essential, including a market management fee whether or not the seller charges one, and a realistic reserve for infrastructure.

Vacancy is not what it looks like

A vacant site in a manufactured housing community is not equivalent to a vacant apartment, and treating them the same overstates lease-up potential badly.

Filling a vacant site requires a home. Either a resident brings one, which requires transport cost and a resident who owns a home and wants to move it, or the community buys and places one, which is capital expenditure creating a park-owned home with its attendant expense ratio.

So vacancy has a cost to cure, and that cost belongs in the analysis. A community at 75% occupancy is not a community that will reach 95% through marketing alone.

Investor preference concentrates above 85% to 90% occupancy, with communities at 95% and near market rents drawing the tightest pricing. Below that, the discount reflects genuine execution risk rather than sentiment.

Capitalisation rate selection

Tier classification is the single largest determinant of the rate, and the market segments clearly.

Premium institutional communities, meaning 200 or more sites, major metropolitan markets, municipal utilities, high occupancy and a strong tenant-owned ratio: approximately 4.0% to 5.5%, with transactions documented in the low fours in the most competitive Sun Belt and coastal markets.

Stabilised communities, roughly 70 to 149 sites with sound infrastructure in suburban markets: approximately 5.5% to 7.0%. This is where most privately held communities transact.

Value-add communities with below-market rents, deferred maintenance and meaningful vacancy: 7.0% to 10% and above.

Smaller rural communities with well and septic and occupancy below 80% price higher still, at 8% to 10% or beyond, reflecting operational risk.

The national band across all tiers runs roughly 4.5% to 9%.

A higher going-in rate is not automatically better value. It frequently signals private utilities, vacancy, deferred capital or weak market fundamentals, and the yield only materialises if the business plan executes. The source of the rate matters as much as the number.

Rent regulation

Several jurisdictions regulate manufactured housing community rents or restrict the grounds and frequency of increases, and the regulatory landscape has been active as the sector has attracted institutional capital and political attention.

Where rent regulation applies, it caps the principal value-add lever. A community whose in-place rents sit well below market is only worth the gap if the gap can lawfully be closed.

This belongs in the legally permissible analysis and in the growth assumptions, and it is jurisdiction-specific enough that it requires checking rather than assuming.

Where these appraisals go wrong

• Park-owned home income capitalised as real property income. The most common structural error.
• Homes not valued separately where the assignment requires allocation.
• Utility structure understated. Private well and septic treated as a site detail rather than as the risk factor it is.
• Deferred infrastructure noted but not quantified.
• Vacancy modelled without cost to cure. Sites filled on paper without the homes required to fill them.
• Market rents capitalised on a below-market community without treating the increase programme as prospective.
• Expense ratio accepted at face value without normalising for owner-performed maintenance, absent management fee and deferred capital.
• Sub-metering upside double-counted, reflected both in expense reduction and in recapture income.
• Rent regulation exposure unexamined.

What a lender is reading for

On the feasibility side

• Is the trade area drawn on employment and wage geography appropriate to the community type?
• Is the addressable pool built from households in a locally derived income band, rather than from population?
• Does the demand analysis include the home financing gate, and is the absorption assumption evidenced from actual fill rates rather than derived from pool size?
• Is infill modelled as a capital project with a return calculation, including the all-in cost per site filled?
• Is utility recapture modelled without double counting, and with the cost lag?
• Is there a component reserve schedule, and does it reflect the actual utility structure?
• Is the rent increase programme modelled with bad debt scaling to the size of the increase?
• Is rent regulation exposure tested as a base sensitivity rather than a footnote?
• Is coverage tested under the definition that applies, and against the agency's minimum?
• Is break-even stated as occupied sites at current rent?

On the appraisal side

• What is the tenant-owned to park-owned ratio, and is home income separated from lot income?
• Municipal or private utilities? And if private, what is the condition and what is the replacement obligation?
• Where do in-place lot rents sit against market, and is the gap treated as achieved or as prospective?
• What is the cost to cure vacancy, in homes and in time?
• Has the expense ratio been normalised, including a market management fee and an infrastructure reserve?
• Does the capitalisation rate reflect the tier, particularly the utility structure and occupancy position?
• Is the community subject to rent regulation?

Manufactured housing communities have moved from a niche most institutions ignored to one of the more competitively bid sectors in commercial real estate, on fundamentals that are genuinely strong: constrained supply, low turnover and durable affordable housing demand. The valuation discipline is remembering what is actually being appraised: sites with infrastructure, leased as ground, with any homes on the balance sheet forming a separate asset that behaves nothing like the land beneath them.

The feasibility discipline is the mirror image. The demand everyone can see is not the variable that decides the deal. The financing available to the household who would occupy the site, the capital required to put a home on it, and the condition of the pipes underneath it are.

For the cross-asset framework, demand regimes, valuation methods and reviewer tests, see the 2026 Feasibility Methodology Atlas.

Frequently asked questions

Can you get an SBA loan for a mobile home park or manufactured housing community?

Generally no. SBA excludes businesses primarily engaged in owning real property and leasing it to others, and a land-lease community whose income is ground rent falls squarely within that description. There are adjacent structures worth examining with counsel, and the analysis turns on whether the borrower provides services substantial enough to change the characterisation, but the default answer is that this asset class routes to agency debt rather than to SBA.

How is demand calculated in a manufactured housing community feasibility study?

From households rather than population, screened to a locally derived income band: above the level at which subsidised housing is the alternative, below the level at which a site-built home is attainable. Then subtract those already housed in the competitive set, and apply a financing gate for the share who can obtain a home loan. The last step is the one most studies omit and the one that decides the absorption schedule.

Why do vacant sites take so long to fill when housing demand is so high?

Because the constraint is not demand, it is home financing. Manufactured homes on leased land are usually titled as personal property and bought with chattel loans, a smaller market with tighter credit standards and higher rates than mortgage lending. A large demand pool converts into a thin monthly flow of approved buyers, and it is the flow rate that a lease-up schedule needs.

What does it cost to fill a vacant site?

More than most pro formas show, because filling a site requires a home. Either a resident brings one, which requires a resident who already owns one and will pay to move it, or the community buys and places one: home, transport, set, piers or foundation, skirting, steps, HVAC and utility connection. Infill is a capital project with a return calculation attached, and whether it clears the cost of capital depends heavily on the lot rent.

Which lenders finance manufactured housing communities?

Fannie Mae and Freddie Mac both run dedicated MHC loan products, and both attach tenant site lease protections covering matters such as lease term, notice of rent increases and the right to sell the home in place. USDA Business and Industry is available for rural communities. Resident-owned community conversions are financed through specialist non-profit and CDFI lenders, and several states give residents an opportunity to purchase when a community is offered for sale. Conventional and bridge lenders cover what does not fit an agency box.

Why does a private wastewater plant change the debt service coverage ratio?

Because under 7 CFR Part 5001 replacement capital expenditure is deducted from EBITDA before the ratio is taken, and a community operating its own treatment plant, wells and lift stations carries a component obligation several times that of a community on municipal service. The utility structure moves the coverage ratio itself, not merely the risk narrative around it.

*Prepared by UnionMetric Appraisal & Feasibility. Capitalisation rates, expense ratios and rent growth indications reflect published sources at the date of writing and vary by market; they are planning references rather than substitutes for property-specific analysis. Rent regulation, utility permitting and manufactured home titling are jurisdiction-specific. Last updated: 2026-07-31.*

*Feasibility methodology, demand arithmetic, reserve component schedules and worked examples in this article are illustrative planning frameworks and require calibration to the subject market and community. Loan programme eligibility and parameters change and should be confirmed against the operative agency guidance at the date of application. Nothing here is legal advice.*