We are not aware of any law or regulation that would prohibit you from refinancing a loan secured by a manufactured home that has not been converted into real property — provided that the terms of your customer’s note do not prohibit refinancing.

The Consumer Fraud and Deceptive Business Practices Act was amended last year to require a lender offering a purchase loan for a manufactured home that has not been deemed to be real property to disclose that “the loan is a chattel loan” and “the terms of a chattel loan prohibit refinancing.” One of the sponsors of the legislation that made this change posted a news item on their website explaining that “a loan for a mobile home located in a mobile home park is different from a mortgage,” that refinancing options for such loans “are limited,” and that the legislation “would require lenders to disclose these differences to prospective mobile home buyers.”

As such, we believe it is possible that the language in the disclosure is intended to reflect the reality that many manufactured home loan notes do not allow for refinancing by their own terms rather than a statutory prohibition against refinancing chattel loans — which we are not aware of.

For resources related to our guidance, please see:

• Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2WWW(a) (“A lender, or agent of a lending company, when offering terms for a mortgage note for the purchase of a manufactured home, as defined in the Mobile Home Park Act, that has not been caused to be deemed to be real property by satisfying the requirements of the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, shall disclose:

(1) any affiliation between the landlord and the lending company;

(2) that the loan is a chattel loan;

(3) that the terms of a chattel loan prohibit refinancing

(4) that, depending on where the consumer affixes the manufactured home (be it property owned by the consumer or on certain types of leased land), the manufactured home may qualify as real property under the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act; and

(5) any other reason that prohibits refinancing.”)