NEW YORK (TheStreet) -- Mobile homes don't always come cheap.
Wells Fargo's (WFC) $9 billion purchase of General Electric (GE) commercial real estate loans, including mobile-home park debt, marks an expansion in alternative lending for the nation's largest mortgage originator, which said this week it had appointed former GE executives to oversee its manufactured housing portfolio.
The San Francisco-based bank is already the biggest manufactured-housing community lender in the U.S., with almost $7 billion in such loans since 2004, principally via Fannie Mae (FNMA), Freddie Mac (FMCC), and the Federal Housing Administration, according to its website. GE Real Estate, with $6.2 billion, came in second for the period.
The bank is keen to increase its manufactured-housing operations even further, partly because of unmet demand from customers. Mobile home park operators are grappling with a lack of affordable financing for their operations, which cater tenants who typically buy their residence but pay rent on the land where it's located. Loans made on such homes are considered chattel financing because they're secured by moveable property, not real estate, and typically carry terms 60% shorter than mortgages.
"Expanding our balance sheet lending in this sector, combined with Wells Fargo's existing product capabilities, provides a full-spectrum of solutions for customers in the manufactured home communities industry," said Mark Myers, the bank's head of commercial real estate.
Wells Fargo, along with Blackstone Group (BX), snapped up pieces of GE Capital's lending portfolio in April when parent-company CEO Jeffrey Immelt decided to spin off most of the finance unit. The companies bought a total of $22.5 billion in assets.