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Ms. Forbath replied that an appraisal has not been conducted. She noted that appraisals of this type are different from a regular single-family home in that many factors must be determined, and would cost approximately $30,000. She stated that in other parks across the State, prices of lots depend upon the location of the park and that she believed it would be equal to or greater than the amount the owner could sell the park today to another party. She added that it is to the owner’s advantage to sell lots gradually over time and that another reason park owners want to convert is because they would prefer to see the park as resident-owned rather than owned by a Real Estate Investment Trust (REIT) or other entity. Commissioner Fox presented a scenario where an 85-year-old is making monthly payments on a $50,000 mobile home, and this resident is given an option to purchase the lot for $200,000. She requested Ms. Forbath to describe the financing of such a loan where the senior resident would suddenly have to come up with funds to refinance the home and purchase the lot. Ms. Forbath stated that assuming the 85-year-old person qualifies as a lower-income resident and applies for the loan from the State, the State will look at the resident’s income and ensure that the total housing costs, including mortgage, property tax, HOA dues, and utilities, do not exceed 30 percent of his/her income. She noted that if $500 is the remainder that would apply toward a mortgage, the State would defer the rest of the principal and interest short of $500 a month. Ms. Forbath continued that if a resident needed to go into assisted living, the property could be sold to pay off the loan, and the property would now include the home and the lot. She added that if the person passed away in five years, the piece of land would be an asset that would go to the heirs, who would have the choice to keep it or sell it. Commissioner Fox inquired what percentage of residents would be able to qualify for a $200,000 loan. Ms. Forbath replied that as long as the residents are low income, they would qualify for the State program; additionally, the park owner would assist those who do not qualify in obtaining a regular home loan by working with lenders and looking for available financing that is much better than what is in place today. Commissioner O’Connor inquired whether or not deferring principal and interest would make the loan actually higher than the value of the lot and home combined. Ms. Forbath replied that this does not typically occur as land values go up and there would be equity. She noted that the home or “coach” would depreciate, but the price of real estate increases. PLANNING COMMISSION MINUTES, February 25, 2009 Page 16 of 29