MHAction leaders meet in front of the Federal Housing Finance Authority in Washington, D.C. calling on Fannie Mae to better protect mobile home residents. CREDIT MHACTION
As litigation director for Iowa Legal Aid, Alex Kornya has noticed the trend of large, out-of-state corporations like Havenpark Communities purchasing mobile home parks (MHPs) when he advises clients. The nonprofit often helps low-income homeowners navigate various legal challenges by offering free legal services. Although he initially viewed this issue through the lens of his […]
As litigation director for Iowa Legal Aid, Alex Kornya has noticed the trend of large, out-of-state corporations like Havenpark Communities purchasing mobile home parks (MHPs) when he advises clients. The nonprofit often helps low-income homeowners navigate various legal challenges by offering free legal services. Although he initially viewed this issue through the lens of his clients, who felt they were being taken advantage of solely by greedy corporations, he began to investigate why and how MHPs can increase rents so dramatically.“When I first started looking at the cases, I thought, ‘Why is this happening? Let’s follow the money,’” he said.After sleuthing through Iowa land records, he discovered that Havenpark’s community acquisitions are financed through Bellwether Enterprise — a commercial and multifamily mortgage bank — the subsidiary of Enterprise Community Partners. This national nonprofit historically has preached the importance of affordable housing.Since Bellwether has Delegated Underwriting and Servicing status from Fannie Mae, Bellwether can provide low-risk loans to Havenpark, according to a report from MHAction.These loans have “supercharged” Havenpark’s asset acquisitions, said Havenpark Managing Partner Robbie Pratt in an online archive of a 2019 Fannie Mae brochure.Once Mr. Kornya examined the Fannie Mae underwriting associated with these loans, he realized the loans are structured to require a certain level of cash flow to meet underwriting standards. He said they require special sign-off from a Fannie Mae delegate like Enterprise before approval.“So they would approve the rent increases, essentially,” he explained. “It wasn’t just Havenpark coming in and doing this. There was a system in place. Looking at the underwriting manual…they required that you have a certain amount of cash coming out of the park in relation to the amount you borrowed. So how much you paid for the park, or how much you borrowed against the park, determines what your payments are.”In other words: “The amount of money that is borrowed is many times more than the publicly assessed land value,” said Mr. Kornya. “The number of times by which the loans sometimes outstrip the assessed value is just mystifying.”“I feel this is the key to figuring out the real story behind the rent increases because it’s more complex than just greed, although I think greed plays a part,” he added. In the case of Golf View in North Liberty, Havenpark, in an email to the CBJ, said the previous owner dictated the $12 million purchase price. The former owner was a local developer who believed the land, if redeveloped for a different purpose, was worth around this asking price.Enterprise did not agree to an interview but stated in an email they “do not have a direct relationship with Havenpark; they mostly deal with our independent subsidiary Bellwether.”According to Bellwether’s website, a large portion of their revenue supports Enterprise.An online policy brief by Enterprise titled “Preserving the Affordability of Manufactured Homes in Land-Lease Communities” talks about the innate vulnerabilities tenants face by investors looking to maximize profit, raising further confusion over whether they agree Havenpark’s business strategy preserves affordable housing.Bellwether also declined an interview on their connection with Havenpark but said they are proud to have contributed more than $100 million in the last decade toward affordable housing.“[Enterprise] come from this interesting backstory, which I feel is based on good intentions,” said MHAction Executive Director Kevin Borden. “It’s really disturbing that they’re in this space.”Mr. Borden called on Fannie Mae and Freddie Mac to implement and enforce stronger guidelines surrounding the loans they create and include stipulations that protect residents, such as rent justification rules.
