Buying an Idaho mobile home park: what you own is the dirt and the pipe

A mobile home park arrives in front of a lender the way an apartment building does: so many units, so much rent, very little turnover — better than an apartment building, because a resident who wants to leave has to move a house. Then the lender asks what the collateral is. In an apartment building it has the dwellings. In a park it has dirt, roads, water and sewer lines and a set of ground leases, and the dwellings belong to the people paying the rent. Everything difficult about financing one follows from that, and Idaho writes more of the rest than most states do.

The homes are not real estate, and cannot be

Idaho Code § 63-304 sets out the only route by which a manufactured home becomes real property. The running gear has to be removed, the home permanently affixed to a foundation, the land owned or being purchased by the home’s owner — or leased under specified federal programme guidelines imposing equivalent restrictions — and a statement of intent recorded with the county recorder. Do all of that and § 63-304(2) says the assessor must treat the home like any other site-built residence, and a lender may do the same.

A resident on a rented pad fails the land test on the first clause. So in an ordinary park the homes stay titled, and the county treasurer assesses and collects them in the same manner as all other personal property. Two consequences reach the buyer. Unpaid personal property tax is enforced by a warrant of distraint the sheriff serves, ending in seizure and sale of the home — a process you do not control but will live beside. And the treasurer may demand the current year’s tax when a home is sold or moved, which is where a transfer you were counting on stalls.

If the seller owns some of the homes — and in Idaho’s older parks they usually own a few, picked up from residents who left — those are a separate collateral class inside the same purchase: depreciating personal property on leased ground. Most lenders will either exclude that income or finance it nowhere near the terms they offer on the land, so ask how park-owned homes will be treated before the price is agreed. It changes what the land alone has to support.

The well is two separate problems

The first is a water right. Idaho Code § 42-111 defines domestic purposes — the use needing no permit — as water for homes, camps, campgrounds and livestock, with irrigation of up to half an acre, provided total use stays under thirteen thousand gallons a day, or any other use under 2.8 acre feet a year. The statute then names the exclusions, and mobile home parks and recreational vehicle parks appear there by name, alongside apartments, condominiums and subdivisions, unless the use fits inside that annual ceiling. A park of any real size does not. Pull the water right from the Department of Water Resources rather than taking the seller’s word that the water has always just been there.

The second is the drinking water rules. A park with its own source and at least fifteen service connections, or that regularly serves twenty-five or more year-round residents, is a community public water system. That brings an engineering review, well and distribution drawings prepared by an Idaho-licensed professional engineer, initial and routine monitoring — coliform bacteria, nitrates and nitrites at a minimum — and operation under the direct supervision of a properly licensed operator, the licence class set by the population served and whether the water is treated.

A well-run park already has all of that; the park that does not is not a discount but a remediation project with a regulator holding the schedule. The lines in the ground are the same story without the agency. In a 1960s or 1970s park the laterals are at or past the end of their design life, they are not visible from the road, and replacing them is the largest cheque a park owner writes.

Idaho sets your rent timetable, not your spreadsheet

The Manufactured Home Residency Act, Idaho Code title 55, chapter 20, governs the pad leases you are buying, and § 55-2006 is the section that reaches the underwriting. Rent may be increased or decreased only after the lease term expires, on ninety days’ written notice by first-class mail, certified mail or personal delivery. Increases must be uniform throughout the community, and uniform within each tier where rents are tiered by lot or home size, amenities or location. Amendments to the agreement or the rules need ninety days’ notice and no more than one in any six-month period. A pro rata escalation clause for taxes or other included services needs thirty days.

Section 55-2006 also points at § 55-306, which bars local governments from regulating rent on private residential property, so no Idaho city will cap your lot rent. What the state gives with one hand it schedules with the other. The near-universal park thesis is that rents are under market and can be moved; here that move happens once per lease term, uniformly, with a quarter’s warning. A model that lifts rents in month two is not describing a lawful course of action, and a lender who has financed a park will know it.

The residents’ rights come with the property

Section 55-2009 says a landlord may not deny an owner-resident the right to sell the home on the rented lot, or require that it be removed, merely because it has been sold. The buyer signs a new rental agreement before the sale if the home stays, and the landlord must approve or disapprove the transfer in writing within five working days of a written application. No commission is chargeable unless the landlord acted as the seller’s agent under a written agreement. That is the resident’s equity, and the reason a park is not a building you repopulate at will.

Section 55-2010 sets out terminations. A rules violation: written notice to comply, three days to do it, then at least twenty days to vacate. Non-payment: written notice, three days, then at least thirty. A taking, or the owner simply ceasing to rent lots, needs not less than one hundred and eighty days’ written notice, and rent may not be increased during that period. A landlord who declines to renew needs at least ninety days.

Why SBA is not the answer, and the RV park next door is

This is the shortest conversation in the deal and the one most buyers have late. Under 13 CFR § 120.110(c), passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds are ineligible, with an exception for eligible passive companies at § 120.111. The current standard operating procedure removes the ambiguity: apartment buildings and mobile home parks are not eligible, and neither is a business primarily engaged in owning real estate and leasing it for any purpose.

The same procedure then carves out the asset that looks identical from the highway. Recreational vehicle parks, marinas, campgrounds and similar businesses are eligible where more than half of the prior year’s revenue came from transients who stay thirty days or less at a time, with projections standing in for history on a start-up. Thirty days is the whole distinction: a seasonal RV park on the way to Coeur d’Alene can be an SBA purchase, and the mobile home community two exits later cannot. Where a park has a mixed section, establish that split early and get the eligibility opinion from the lender in writing.

So the realistic stack is conventional bank debt, agency money where the park is large and clean enough to qualify, or seller financing — more common here than in almost any other commercial asset, because so many Idaho parks are still owned by the family that built them. Agency money has conditions of its own: Fannie Mae requires borrowers in its manufactured housing community programme to put tenant site lease protections in place within a year of delivery, among them a one-year renewable site lease, thirty days’ written notice of rent increases, a five-day grace period on late rent, the right to sell the home without moving it out of the community, and at least sixty days’ notice of a planned sale or closure.

Stack that on Idaho law and the stricter rule wins each time. Idaho’s ninety days on a rent increase beats the agency’s thirty, so ninety is your number, and Idaho already protects the sale in place. The one-year renewable lease is the new information for a park running month to month: combined with § 55-2006 it fixes the rent roll to one adjustment a year, announced a quarter ahead. Underwrite that calendar.

Check whether the park is allowed to be there

Most Idaho parks predate the zoning now surrounding them, in Nampa and Caldwell as much as in Post Falls and Rathdrum, and survive as legal nonconforming uses under the local ordinance rather than as permitted ones. The Post Falls code shows the usual shape: a nonconforming use may continue but may not be enlarged or extended. So the question is whether the vacant pads are entitled, or are vacancies in a use that cannot be expanded — and if filling them is what makes the purchase work, that is a planning question before it is a financing one.

The unflattering part

Parks are sold as the most defensible income in commercial real estate: nobody builds new ones, the tenant owns the expensive part, and the rents are below market everywhere. The first two are true. The third is where Idaho buyers get hurt, because moving rents is lawful and slow, and the two cheques that decide the outcome — water and sewer replacement, and buying homes to fill empty pads — sit outside the loan you are arranging on the land.

There is also a plainer point. These are people’s homes, and the statute is written from that premise: ninety days, uniform increases, a hundred and eighty days before you may stop renting lots at all. A plan that depends on moving quickly through residents is not one Idaho law permits, or one a bank wants its name beside. The parks that finance well are bought by owners who mean to run them for a decade, with room in the numbers to replace a water main in year three.