Kevin Clayton’s Ear

What follows is an edited version of email correspondence recently received from a veteran portfolio owner/operator of landlease (nee manufactured home) communities.


“Know what George? If I had the opportunity to sit down and ’talk shop’ with  Kevin Clayton, president & CEO of Clayton Homes, Inc., here’s what I’d say and suggest to him, then patiently await his reply”:

             ‘Tell me if I’ve got this right. Vanderbilt Mortgage and Finance, Inc., and 21st Mortgage Corporation, finance HUD Code manufactured homes; the former, financing said homes only for Clayton retail salescenters; the latter, financing these homes for everyone else, maybe soon via the newly revised FHA program. Meanwhile, 21st Corp’s chattel finance program isn’t very popular with LLCommunity owners, given its’ plethora of contractual ‘gotchas’.

            It’s also my understanding, Vanderbilt isn’t financing many manufactured homes these days, because their underwriting guidelines (i.e. credit score, income/debt ratios, down payment) are so tight – to cover cost of possible defaults and repossessions, prospective Clayton homebuyers are opting to buy foreclosed-on, stick–built houses for $.50 on the dollar. Result? A greatly reduced demand for new manufactured homes!

Amidst all this, I know more than a few landlease community (‘LLCommunity’) owners interested in becoming bona fide Clayton retailers; willing and able to sell the firm’s new ‘community series’ homes on–site, with chattel financing provided by Vanderbilt Mortgage and Finance, Inc.

Given the accuracy and timeliness of the previous paragraphs, why wouldn’t  Clayton Homes and Vanderbilt Mortgage be interested, even eager, to craft a new and unique business model that’d…

1)      Sell and finance many more affordably-priced new ‘community series’ manufactured homes, via Clayton–affiliated retail salescenters located within LLCommunities!

2)      Ensure LLCommunity rental homesite fees are in sync with other forms of ‘for sale’ and rental housing in the same local housing market; and, new home price points are truly affordable, in relation to the prevailing Area Median Income (‘AIM’) per postal zip code; all with the aim of getting the ‘site rent meter running’ via increased occupancy!

3)      Adequately protect financial interests of the lender, regarding these homes, via written agreement with the LLCommunity owner, so mortgage underwriting guidelines can be relaxed and more homes sold!

If interested in discussing this further, Kevin; let me know, and I’ll bring along other veteran LLCommunity owners who’ve already expressed strong interest in creating this  WIN – WIN – WIN  (i.e. manufacturer – lender – property owner) partnership!’   SR


Know what? This new and unique business model isn’t a novel concept, not by a long shot. It was broached earlier this year, shortly after Clayton Homes named its’ first two Business Development Managers (‘BDM’*), and about the time the firm introduced its new E Home (nee Evolution series home). Interest is there! But at least one implementation challenge lies with Clayton in-house retailers eschewing ‘new home sale competition’ from what they perceive as interlopers, LLCommunity owners with Clayton-affiliated retail salescenters on–site.  It’ll be interesting to see if and how Kevin responds to this earful.

What are your thoughts about this lively matter? Good or bad for the MHIndustry & LLCommunity asset class, and why? Always appreciate your critique and input.

End Note.      For a free list of all BDMs marketing HUD Code manufactured homes into LLCommunities, call (317)346-7156 and request it.


George Allen via or or the MHIndustry HOTLINE:

(877)MFD-HSNG or 633-4764 or via GFA c/o Box # 47024, Indpls, IN. 46247


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