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The debt and equity trends buffeting the manufactured housing space are, in many ways, similar to what is happening throughout the entire commercial real estate industry. Like the other assets class, financing has become more scarce for these transactions and financial providers are much more choosy about what they underwrite. Also, many companies in this class are having difficulty; one only has to look at CIT Group’s recent sale of its manufactured housing portfolio – at an approximate $170 million loss. However, like the office, multifamily and industrial asset classes, there are some financial providers angling to pick up shares, instead of shutting down lending as many of the competitors are doing. Green Park Financial, thus far, has closed more than $150 million in manufactured housing loans this year, which is close to 75% more than its 2007 volumes at the same point. This year Green Park is likely to close the books on some $300 million of loans, according to Ted Patch, SVP and chief production officer.

GlobeSt.com: Why manufactured housing and why now?

Patch: First of all, we are a Fannie Mae DUS lender providing debt for the manufactured housing communities, so we have always have had a feel for this space. What we have seen is that as the market continues to be volatile a lot of the competitive lending sources – some of which were not as focused in this space – have decided to flee. The result is a fairly dramatic increase in the number of manufactured housing communities looking for financing.

GlobeSt.com: So it is the same story playing out in other asset classes as well, with the remaining finance providers able to pick from a wider choice of deals?

Patch: Yes, that is about correct. But manufactured housing is a very stable asset class, because you have people living in these communities in homes that they own. They would have to physically relocate the home if they were to leave. So one such a housing community is stabilized, it stays that way for a long period of time.

GlobeSt.com: Your production volume this year is much larger than last year. Have you changed underwriting standards in response to what is happening in the market?

Patch: In general, credit standards have tightened somewhat, which is consistent with conventional apartment financing – but nothing specific to manufactured housing, either better or worse. LTVs, credit quality of the borrower and so forth are all tighter. I don’t think you will find any asset class these days that is being financed at the same credit standards from two years ago, or even last year.

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