Buying a Mobile (or Manufactured) Home in Santa Cruz County
There are many things to consider when purchasing a mobile or manufactured home in Santa Cruz County, this guide will help you decide if it is the right choice for you, and if so, the best way to go about it.
Mobile and manufactured homes can be a great and affordable housing option, especially in Santa Cruz where many parks are located within walking distance to the beach. Can you say Surf Shack!? They can even be a great investment for someone looking for a second home, a place to earn some sweat equity, or a place to retire comfortably. That said, not all parks are created equal, and the nuances are important. This article discusses some of the many factors to consider before deciding if a mobile/manufactured home is right for you and certain pitfalls to avoid.
Before we start, let's clarify something. What is the difference between a "mobile" home and a "manufactured" home? Manufactured homes and mobile homes are both regulated by the Housing and Urban Development division of the federal government ("HUD"). According to HUD, a factory-built home made before June 15, 1976 is a mobile home and one built after June 15, 1976 is a manufactured home. In Santa Cruz County, we have a lot of both, and for the purposes of this article I will mainly use the terms interchangeably.
Now that we've got that sorted, let's dive into some main factors to consider in your potential purchase:
1. Park ownership:
There are three main types of park ownership, all of which present different positives and negatives. The three types are: Park-owned, Resident-owned, and Co-op. A list of local parks and their ownership types can be found here.
Resident-owned parks are typically the most coveted and easiest to get loans for, but they are also the most expensive in terms of purchase price. Homes in these parks can be double the cost of one in a park that is park-owned or co-op. Owners are also responsible for paying property taxes and HOA dues.
Co-op parks are collaboratively owned by park residents. There is often a hefty buy-in fee to these parks as well as HOA. Loans can be tricky in these types of parks.
Park-owned parks are often the cheapest to buy in. Instead of HOA, home owners just pay space rent (which may or may not fall under rent control - see below!). Loans are possible in these types of parks, and if the park is under rent control, they can still be a fantastic option. One potential pitfall is that the park owner could try to sell the entire park someday to a developer. There are regulations in place to protect residents in this instance, but it is a consideration to be aware of.
2. Rent control (This section only pertains to Park-owned parks):
Unincorporated Santa Cruz County (including Live Oak,Pleasure Point, Soquel, and Aptos) DOES have rent control for space rent in mobile home parks. Parks in these jurisdictions typically have pretty affordable space rent in the $400-500/month range. As long as your manufactured home is your primary residence and otherwise covered by the Rent Adjustment Ordinance, your rent may be raised only once per year and increases are limited to the criteria provided in the ordinance, which is based on the Consumer Price Index changes since 1982. The rent may not be raised when the manufactured home is sold.
Santa Cruz City and Capitola City no longer have mandated rent control for mobile home parks, which is why a couple parks in town have VERY high space rent (ahem, De Anza we're looking at you). This makes purchasing a mobile home within these jurisdictions a little bit more risky and resell pretty difficult. Note - some parks in City of Capitola have made individual rent-control agreements with the City, but these agreements vary and pose some additional pitfalls.
Scotts Valley and Watsonville have their own space rent control ordinances that can be found here.
Beware - CA law allows mobile home owners the option of signing a month-to-month, annual, or long-term lease agreement with Park ownership. If you sign a long-term lease (over 12 months), you may lose rent control protections, which can also make it more difficult to sell your home in the future.
3. Park Restrictions:
Regardless of ownership type, each park varies in its restrictions for the following categories. Consider asking park management about these topics before moving forward with a purchase. Try to also in mind if these things will make it more or less difficult to resell your home in the future:
Can you rent out the home or let someone other than yourself (ex: family member) live there? Tip - mobile homes can be good rental properties, if you find a park that allows you to rent or sublet. What you can charge for renting out your home does NOT fall under rent control. The ordinances above only apply to space rent.
Age restrictions? There are a lot of 55+ parks in town, and they have some of the best deals. These can be great communities for the elderly as well.
What is required for park approval? Each park has different criteria for approving home ownership when it comes to income, credit scores, etc.
Keep in mind that while mobile home prices in Santa Cruz County are relatively quite affordable, even compared to condominiums or townhomes, you still have to factor in:
HOA or space rent
Higher downpayment requirements
Shorter loan terms (15-20 years instead of 30)
Higher interest rates (often double conventional loan rates)
We already talked about loanability differences between park types, but mobile home loanability and loan requirements also vary based on the specific age of the mobile home (whether or not it is pre 1976) and whether it is single-wide vs double wide. Loan terms can vary widely on mobile homes, so it is best to consult a few lenders before choosing one.
Locally, Bay Federal Credit Union and Karma Mortgage offer manufactured home loans, but they are not always able to loan on older, single-wide mobiles. For those types of homes, we suggest Santiago Financial or Murphy's Bank.
If you are thinking of purchasing (or selling) a mobile home in Santa Cruz County, reach out to us today to get started!
Realtor + Founder