Summary of Mobile Home Real Property Financing Legislation
Prepared by Arthur Hamlin, Vermont Department of Housing & Community Affairs
H. 331 creates a method for a person who is buying or financing a mobile home on leased land, which is generally located in a mobile home park, to finance the mobile home with real estate financing. The bill also provides a process by which a person whose mobile home is currently financed as personal property to “convert” their mobile home to real property for financing purposes. The provisions of the bill are contained in Sections 38 through 43 of Act 176 (H.863). This law is an important first step for lenders who want the ability to sell mobile home loans on the secondary market. Having the secondary market available for the purchase of mobile home loans has the potential to provide much more competitive loan rates and terms for consumers. Importantly, the new law does not affect the availability of secured personal property loans for mobile homes, or immediately convert all mobile homes into real estate. Section 38 adds 9 V.S.A. §2601(c) and (d) which provide that when a mobile home is financed as residential real estate it will be defined as real property, and describe what is meant by a mobile home being “permanently sited”. Section 39 amends 9 V.S.A. §2603(b) by stating that the intention to permanently site a mobile home on owned or leased land for continuous residential occupancy is sufficient for the financing of the mobile home as real estate. It requires mobile homes permanently sited on land owned by the home owner to be financed as real estate, and allows mobile homes permanently sited on leased lots to be financed as real estate. Section 40 creates forms for Real Estate Warranty and Quit Claim Deeds for Mobile Homes in 9 V.S.A. §2604. If the mobile home is on leased land, such as in a mobile home park, the land owner’s signature is required to consent to the financing, but may not be withheld without good reason. Effective July 1, 2008, all new mobile homes purchased at a dealership that are financed as real estate must be conveyed by a deed substantially in the same form as provided in 9 V.S.A. §2604 for the initial and all subsequent transactions and conveyances. Section 41 adds 9 V.S.A. §2605, entitled “Mobile Home Bill of Sale Conversion Process.” This conversion process allows a mobile home owner to voluntarily convert their mobile home from personal property to real property by filing a request to purge the (personal property) security interest with the Town Clerk and presenting an executed Mobile Home Deed along with terminated UCC financing statements, if any, and the uniform mobile home bill of sale. Upon conversion the mobile home becomes real estate and once converted cannot be converted back to personal property. Section 42 adds 9 V.S.A. §2606 which creates the process and forms for relocation of a mobile home to another municipality within Vermont or to another State.