Mobile Homes Don’t Stay Put By: Frank Friday, Government Relations 5 Back in 2000, the Kentucky legislature created something popularly called “an affidavit of conversion to real estate”. This allowed a mobile home owner to surrender the title to the County Clerk if it had no outstanding liens, effectively making the structure part of an existing piece of real estate like any other home. This was done primarily to allow mortgage lenders to maximize the collateral value of such properties on their books. A few decades later, however, some banks are having second thoughts, finding they may be better off simply selling mobile homes as pieces of property in a financial recovery operation. Consequently, HB 270 was passed this year to create an “affidavit of severance” to undo the conversion of real estate. This new document will require reference to the previous conversion and a legal description of the real property where it sits. A certificate from an attorney must also be included, stating- “As of the date of the titling of the severance, there are no security interests or liens in the manufactured home that have not been released by the secured party and that the title to the real estate marketable, free, and clear of liens, or certification of any holder of a security interest in the manufactured home of: 1. The amount of any existing security interest; and 2. The secured party’s consent to the issuance of a title.” The Clerk is also asked to provide copies to the Property Valuation Assessment and the Transportation Cabinet. Mobile homes themselves are facing a bit of an existential crisis. Most new ones are sold in the rural South and West. West Virginia saw the most in 2015, while Kentucky was the fifth-best market. This is a big change from a generation ago, when home parks were everywhere, especially California. The industry developed a reputation for poor quality, using cheap insulation, too-small electrical cabinets, and moisture soaking siding. Some lenders and park owners were also accused of underhanded practices. HUD estimates a typical mobile home will last only 35-50 years, but you get what you pay for. The average price of a new mobile home last year was $67,800, compared to $380,000 for a site-built home. Over the years, many private builders and architects have experimented with mobile home designs to bring low-cost housing to inner city sites. Unfortunately, such projects have never shown to be successful as inherent construction costs and unfavorable zoning regulations have always proven insurmountable. For now, though, mobile homes will keep popping up in more rural parts of Kentucky and thanks to HB 270, they may never be pinned down in one place.