Today’s financial climate is one of the most serious problems we face as an industry. Lenders are becoming fewer and are limiting their products such that retailers and consumers must explore alternative lending sources like never before.
To help in that search, CMHI is contacting local and regional banks hoping to attract new members. In addition, we are contacting Title Insurance companies that are active in our industry in hopes of finding active lending sources. All members are encouraged to do the same and share the information with CMHI. To help you with your presentation, we have updated our brochure Financing with Confidence. This piece is available to all CMHI members at a nominal fee. To view the document click here. To order the professionally printed copies, please call CMHI.
The good news…there is money out there to lend! The challenge…finding it! More than ever, we are challenged to “think outside the box.” Here are a few ideas you may not have thought of:
RETAIL LENDING
The California Housing Finance Agency (CalHFA)
Although all programs under their supervision and management are not eligible for manufactured housing several are:
These programs are all detailed on the CalHFA website at www.calhfa.ca.gov or you can email homeownership@calhfa.ca.gov for more information.
Your Local Title Insurance Companies
Title insurance companies know who is funding manufactured home loans. After only one phone call, I was emailed the list of lenders that one title company closes for, as well as, the list of all the insurance companies they use. Only one of the companies was a member of CMHI! We called each one of them and have mailed follow-up information.
Local Credit Unions
Historically, credit unions only provided financial services to a membership base specific to an industry. Times have changed, however, and many credit unions now are “community” based with a much broader membership reach. These credit unions not only focus on the needs of the community, but often offer very attractive products and underwriting.
Mobilehome Park Owners
Mobilehome park owners are feeling the financial crunch as well. Vacancies can be devastating to a community and many owners are working to provide loans to homeowners. CMHI recently attended a WMA meeting where this was discussed at length. Recognizing that not all owners have the resources, CMHI members are encouraged to reach out to park owners in their communities and strive toward a win-win situation.
FLOOR PLAN LENDING
The U.S. Small Business Administration (SBA) launched a Dealer Floor Plan Lending Pilot Initiative effective July, 1, 2009. This program is new to the SBA and new to their approved lenders. Great effort has been taken to clarify the parameters with the SBA approved lenders, however, these lenders will need your assistance in understanding our industry.
To that end, MHI has created a Step-by-Step Guide for Retailers. Below are the key points that MHI as identified to assist retailers in their approach to SBA lenders in their communities:
Step 1 – Identify SBA Lenders
To find an SBA lender in your area, you will want to go to www.sba.gov and click on “Local Resources.” From there, click on your state to get information on your local SBA office. Contact them for SBA approved banks in your area. You may also want to ask them if they are aware of the pilot program for floor plan inventory financing and if they are working with the SBA banks in the state on the program. For example, the SBA state offices in Pittsburgh and Philadelphia are working to educate interested SBA approved lenders in Pennsylvania on the pilot program.
Step 2 – Contact SBA Lenders
Contact the SBA lenders that you have identified and ask to speak to the person
who handles SBA loans. If this individual is familiar with the SBA pilot program –
great! Make an appointment to see them in person. If this individual is not familiar with the program, ask them for an appointment to come and speak to them about the pilot program.
Step 3 – Prepare for Your Meeting
When you meet with the lender, be prepared. If your SBA lender was not aware
of the new pilot program, ask for a meeting anyway. Use this as an opportunity
to educate the lender about the program. (In other words, don’t take the first “no”
as the final answer.) You should bring the SBA Dealer Floor Plan Financing FAQ
included in this document and also be prepared to provide information about your
business. This might include a customized PowerPoint presentation that can
educate the bank about our industry and your business (see the MHI PowerPoint
templates on the Web site for assistance), information about the financial
condition of your business, and information about your personal finances. Any
marketing plans and projections for future business would also be helpful. Refer
to the SBA Loan Checklist for the type of information the lender will need to
approve an SBA loan and provide as much of that as you can.
This is a list of some of the information you may want to prepare:
Step 4 – You Are the Expert
You may be the expert in the room when you meet with your local bank regarding floor plan lending. You are definitely the expert on manufactured housing. Be prepared to explain how a floor plan line of credit usually works in the industry.
Provide information about typical time periods, curtailments, manufacturer repurchase agreements, etc.
Step 5 – Be Willing to Bring Something to the Table
You may need to establish a depository relationship with the lender if you are not currently doing business with them. The bank may be more willing to assist you with your loan needs if you are a customer already. Also, if they do consumer manufactured home loans, let them know that you will refer business to them.
Step 6 – A Presentation with Polish
Make a detailed outline of all the points you want to cover and put your materials in a professional folder. Dress professionally. Offer to give a tour of your business. Be sure to follow-up promptly with any requests for additional information from the lender.
The complete guide and many forms to assist you are available on MHI’s website at www.manufacturedhousing.org.