Community FinancingThursday, October 15, 1 p.m.

Larry MathewsAmerican Commerce Bank

What Do Banks and Community Owners Have In Common?

Shrinking Numbers Overregulation Poor Image Lack of Capital Fragmented Trade

Assoc. Focus of Trade Assoc. Larger Size Advantages

Commonalities

Manufactured Housing Community Access to Capital

FNMA and FreddieMac◦ Larger projects◦ Little credit for park owned homes underwriting

(25%)◦ No programs for purchasing homes◦ Considerable focus on quality of community◦ Older Community must demonstrate new homes

being placed on vacant sites◦ Paved roads

HUD programs Like Sasquatch and

Loch Ness Monster, we have all heard of them, but very few have ever seen them.

HUD closed one HUD 207(m) loan in 2013.

Access to Capital (cont.)

Provide access to capital for acquisitions, refinance and rehab of existing communities

Provide access to capital for purchase of homes for communities

Provide assistance with trade associations

How can American Commerce Bank address MH industry access to capital ?

Management probably most important component of decision

Amortize up to 30 years on property Full amortization loans with no balloons. No interim

maturities or balloons reduce expenses and general economic risk. On $2 million loan over 20 years saves approximately $16,000 in renewal expenses.

No prepayment penalty Fixed rates up to 7 years or floating rates Can “buy down” interest rate by keeping deposits in bank Closing costs responsibility of Borrower Can provide some government assisted financing in rural

areas (USDA) Brochures available that outline this program

Loans for acquisitions refinance and rehab of existing communities

Finance new home purchases for community owners directly, as well as with Manufacturer Programs

Communities can be approved for individual purchases or numerous purchases

Up to 100% financing of net invoice price Transportation, installation costs,

skirting and any other setup costs responsibility of purchaser

Loans for purchasing homes

MH trade associations and bankers associations work together◦ National and State

Banks need diversification from just Commercial Real Estate. Home financing helps.

Banks need Community Reinvestment credit. Loaning to communities can show commitment to low and moderate income borrowers.

Work with Trade Associations

Work toward some GSE help with smaller loans. GSEs only guarantee percentage of loans for investors. Why not guarantee same amount for community bank loans that will not be sold?

DUS lenders have “lock” on GSE market. Why not allow community banks to originate loans less than $5 million? We have experience with SBA, USDA, FNMA mortgages and FHLB. FNMA underwriting guidelines are no more difficult.

ACB and Trade Association Effort

Q & A

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