Money is tight for Mary Hunt. She often has to decide which bills to pay on time — heat, her car loan, the phone bill. But she's been able to scrape by for more than 30 years, living in a mobile home park in Swartz Creek, Mich.
She owns her home outright. But she needs to pay monthly "lot rent" to the park for the little patch of land that it sits on. And the managers of the park, a couple named Stan and Nancy, used to live right here.
"I would call up and say, 'Hey, look, I've got half the rent,'" Hunt says, "I'll bring the rest, you know, next week or whatever." Stan and Nancy would say okay. So she could make it work, even earning just $10 an hour at her job driving elderly patients to doctor's appointments.
But a few years ago, Stan and Nancy retired, a local landowner sold the park, and Hunt, 50, learned that her new landlord was an out-of-state company in the business of buying mobile home parks.
These days, that's not unusual. A generation of mom and pop owners of mobile home parks are retiring and looking to sell. And investors and companies are swooping in to buy up these parks. They raise fees and rents for the land under the homes, and evict people who can't pay. Housing advocates say it's a disturbing trend that's happening to residents in parks around the country.
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.
This trend is hurting the homeowners that can least afford it. For millions of Americans, owning a home in a mobile home park has been an affordable way to keep a roof over their heads. Families living in them make around $32,000 a year.
In Hunt's case, the new owner is a real-estate investment firm named Havenpark Communities. It started raising her lot-rent and fees. Since 2017, the rent and fees have risen about 40%, from less than $350 per month to more than $480.
And, just as problematic for Hunt, Havenpark is quick to file for eviction. She says the company wouldn't be flexible with her and take partial rent payments the way Stan and Nancy would. She says, instead, when she fell behind on the lot rent, Havenpark filed an eviction case against her.
People in mobile home parks are very vulnerable to losing their homes this way. Older homes like Hunt's can't physically survive being moved to another park. And even when that's possible, it costs upwards of $5,000 — money people don't have if they're having trouble paying lot-rent.
So, over a relatively small sum, her $480 in lot rent and fees, Hunt could quickly lose the home she owns and has lived in for decades.
Havenpark actually has now filed to evict Hunt three times. The first two she says she borrowed money from friends and worked through weekends and managed to catch up in time.
But then, earlier this year, Hunt got sick with COVID-19 and fell behind. Havenpark sued to evict her again, and this time she wasn't able to catch up.
Sitting in her dining room over the summer, with court documents spread out on the table, Hunt broke down in tears, afraid of what was going to happen next.
"I could be out next week without a place to live," she said.
A federal eviction moratorium was about to expire and Hunt was running out of options. She took care of her parents here before they died. The bookcases are full of family pictures, her parents' dishes, and keepsakes.
"What's going to happen is I'm going to go with what I have on my back pretty much," she worried. "Everything will go to the road and there won't be anything I can do about it."
Havenpark declined an interview but said in a statement that starting last year the company adopted a new policy that it won't raise monthly lot rent more than $50 in a year. The company says it charges the fair market rent for an area.
Havenpark was within its legal rights to file eviction against Hunt. And they're not alone. Other companies are buying up mobile home parks too. And, one might think, all this is just part of life in a competitive housing market. Landlords are entitled to their rent.
But there's something else at play here too — when mobile home park investors like Havenpark put the squeeze on residents like Hunt, they're getting help from an unlikely source: federally backed companies with a core mission of helping to make homeownership affordable.
"When private investors come to buy parks, [they] raise the rent, sometimes 20, sometimes 50, sometimes 70 percent," says economist George McCarthy, president of the nonprofit Lincoln Institute of Land Policy.
And, he says — what's really troubling to him — is that the government is basically turbo-charging this trend.
Several industry insiders tell NPR that this is the way it works: When a company raises the rents and fees in a park, that increases the cash flow and makes the park more valuable on paper. So the company can then borrow more money against the property.
It's similar to refinancing your house if it's risen in value, and pulling cash out with a new mortgage.
So the company borrows another, say, $3 million and, cash in hand, repeats the cycle at a different mobile home park, potentially displacing more of the nation's poorest homeowners.
And the companies do that again and again — it's a cascade of borrowed money used for buying up mobile home parks.
The loans often have very low interest rates, because they're guaranteed by Fannie Mae and Freddie Mac — the government-backed entities at the heart of the U.S. mortgage market.
"They provide very, very low cost debt for these investors to ... get enough cash out to go buy additional parks," says McCarthy.
To be clear, this practice is not illegal. In fact, a Havenpark executive touted the benefit of these government backed loans for his company in a Fannie Mae online brochure. Havenpark Communities President and CEO Robbie Pratt said the Fannie Mae backed loans have, "supercharged our asset acquisitions." Pratt said the loans allowed the company to buy more than $100 million worth of mobile home parks in a single year.
"What's ironic about it is that one of the missions of Fannie Mae and Freddie Mac is to help preserve affordable housing," says McCarthy. "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."
The company acknowledged to NPR that some of its manufactured home parks are financed with such loans but declined to offer any other specifics. Havenpark says it's important to note that sometimes when it buys a park it prevents it from being turned into, for example, a shopping mall.
The company said in a statement, "Havenpark's business model and goal is to preserve affordable housing by purchasing manufactured home communities."
But that claim raises the eyebrows of affordable housing advocates. "How can that be their goal?," asks Elisabeth Voigt with Manufactured Housing Action. Her non-profit group helps organize residents and pushes for better protections for them at the state and federal level.
"If [Havenpark's] goal was to preserve affordable housing they would be working with tenants," Voigt says, "to come up with a payment plan, to accept partial payments."
"The last thing they would be doing," she says, "is immediately filing for eviction as soon as a family falls a little bit behind, especially in the middle of a global pandemic."
NPR previously reported on a family with a 5 year old son who lost their home of 16 years during the pandemic after Havenpark evicted them. The company filed for eviction after the family fell just one month behind on lot rent and owed $621.
The government could be helping mobile home residents
Havenpark and other investors buying up mobile home parks are getting help from these government backed loans. So far, the residents of mobile home parks themselves aren't getting that sort of help. But they could be.
McCarthy and Voigt both say the Biden Administration can fix that situation. Without an act of Congress, it could direct Fannie and Freddie to make it easier for residents to buy their own communities.
These days more residents are trying to buy up their own parks, as co-op's, so they determine the rents and fees for themselves.
Help from Fannie and Freddie would be welcome news for park residents like Charlie Smith who retired to the Brookside Village mobile home park in Plainville, Mass., in 2013.
Smith, 80, has a nice yard with a garden, a hammock for naps and a parking spot for his Yamaha Royal Star motorcycle. And he's proof of what's possible.
A few years ago, he received a letter. It said the local family business that owned his park was selling it to an investment firm for roughly $4 million. He and especially his neighbors on lower fixed incomes feared the worst.
"They weren't just concerned," he recalls. "They were actually terrified, saying - they would turn to me and say, 'Charlie, if they force us out, where would I go? We couldn't afford an apartment. We couldn't afford, you know - like, what the hell would we do?'"
But in Massachusetts there's a law that gives mobile home park residents a chance to buy their park when it goes up for sale. It's called the right of first refusal. Only a handful of states have such laws. And with the help of a non-profit they were able to pull it off.
It wasn't easy. They had to match the $4 million offer the investor had on the table. To do that, the residents had to agree to a sizeable increase in their lot rent, so their new co-op park could pay back the loan.
Andy Danforth works with the nonprofit ROC USA helping residents buy their own parks and was the point-person on the ground at Brookside Village. And he says it's frustrating that when residents try to buy their own park like this, they have to do that without any help from the federal government, from Fannie and Freddie. That means the residents have to pay much higher interest rates — and therefore pay a lot more money over time — when they buy their own park.
"I've done over 50 [co-op] conversions, over a quarter-billion dollars, and not a cent of it [was backed by] Fannie Mae or Freddie Mac," Danforth says.
Voigt with MHAction says Fannie and Freddie should stop backing low-interest rate loans to the investors buying up mobile home parks unless they require much stronger protections, and, "figure out a path that preserves communities and protects residents."
She and McCarthy, of the Lincoln Institute of Land Policy, both say Fannie and Freddie could be directed to back low interest rate loans to residents to help them buy their own parks and form co-ops.
"The U.S. government could tell Fannie and Freddie what to do and how to do it," McCarthy says. "Actually make them honor their original mission, to use innovative financing to preserve this really, really critical, affordable housing stock."
Technically there is already a way for co-ops to get loans backed by Fannie or Freddie - but they can rarely qualify, McCarthy says, often because the down-payment requirement is too high.
Fannie Mae alone for example backed more than $5 billion just last year in loans to mobile home parks, or manufactured home communities, and none of that was for parks that were being turned into co-ops like Smith's.
McCarthy's non-profit is leading a new coalition of 20 affordable housing groups that are pushing the federal regulator overseeing Fannie and Freddie to do more to help residents of mobile home parks.
An official with the regulator, the Federal Housing Finance Agency, said that similar calls for Fannie and Freddie to find ways to make more loans to residents forming co-ops were raised through the public comment process: "We heard those appeals and are taking them into serious consideration."
NPR reached out to Fannie Mae and Freddie Mac, and Freddie Mac said in a statement that more recently they've been requiring more protections for tenants in mobile home parks and that Freddie Mac is, "committed to supporting resident-owned communities."
As for Mary Hunt in Swartz Creek, Mich., it looks like she's going to be ok for now. She had applied for pandemic rental assistance money. When NPR pressed Havenpark, the company said it wouldn't evict her or other residents waiting for that rental assistance help. And, now, Hunt says the payments were approved and her back-rent has now been paid.
But Hunt is still in a vulnerable situation. Her lot-rent and fees are still much higher than they were a few years ago. So she's hoping she doesn't wind up facing eviction again.
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