The federal government is playing a role in helping companies that purchase mobile home parks evict residents through taxpayer-funded financing.
NPR reported last week that a trend in the industry is shifting away from so-called “mom-and-pop owners of mobile home parks” as they increasingly retire and look to sell, with companies and investors purchasing the properties and then raising lot rent and other fees. And the low-income residents of these parks, many averaging around $32,000 in income per year, cannot afford the increases, leaving many at the mercy of eviction notices.
“What’s more, these companies are getting help doing that from billions of dollars worth of low-interest-rate loans backed by the federal government. And the volume of that financing has risen sharply in recent years,” NPR reported, adding that the “trend is hurting the homeowners who can least afford it.”
Swartz Creek, Mich., resident Mary Hunt, whom NPR profiled for its story, is one such victim of these practices. While she owns her home, she only earns around ten bucks an hour driving elderly people to their medical appointments and cannot afford the increased lot rent she is being charged by a new company that bought the park where she has lived for three decades, a couple of years ago.
She has survived a couple of eviction attempts by scraping together the $480 in rent and fees — monthly expenses that have risen from less than $350 per month in 2017 — a couple of times. But she ran out of options after she got sick with COVID earlier this year and now faces eviction.
“I could be out next week without a place to live,” she told NPR tearfully.
Her park was bought by Havenpark Communities, and officials with the company told NPR it has vowed not to raise lot rents by more than $50 per year, and that the company is charging the current going rate at Hunt’s park.
“Havenpark was within its legal rights to file eviction against Hunt. And it is not alone. Other companies are buying up mobile home parks, too. And, one might think, this is just part of life in a competitive housing market. Landlords are entitled to their rent,” NPR added, noting that it and similar companies are “getting help from an unlikely source: federally backed companies with a core mission of helping to make homeownership affordable.”
George McCarthy, president of the nonprofit Lincoln Institute of Land Policy, told NPR, “When private investors come to buy parks, [they] raise the rent, sometimes 20, sometimes 50, sometimes 70 percent.”
He added that to him it is outrageous that the federal government is essentially hastening the process of having people evicted.
Experts explained that companies that buy up parks increase rent to increase the value of the property on paper, which then allows them to claim to have more collateral so they can borrow more money to buy additional properties. And, since the loans are guaranteed by Fannie Mae and Freddie Mac, the two federal loan houses, the interest rates are low.
“They provide very, very low-cost debt for these investors to … get enough cash out to go buy additional parks,” McCarthy, said, adding that the practice isn’t illegal.
“What’s ironic about it is that one of the missions of Fannie Mae and Freddie Mac is to help preserve affordable housing,” he added. “And they’re doing exactly the opposite by helping investors come in and make the most affordable housing in the United States less affordable all the time.”
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