Floating Home Loan Glossary

A loan with an interest rate that changes periodically based on a market index, after an initial fixed period. ARMs are rare in floating home lending — the market lacks the standardized secondary-market products that drove ARM development in conventional real estate. Most floating home loans are fixed-rate for their entire term.

American Boat and Yacht Council standards for marine electrical systems, plumbing, and safety equipment. Marine surveyors check for ABYC compliance as part of a floating home survey. Non-ABYC-compliant electrical systems are frequently cited deficiencies that must be corrected before a lender will fund. Lenders care about ABYC compliance because it directly affects the safety and insurability of the collateral.

The process of establishing the market value of a floating home for lending purposes. Unlike real estate, which uses comparable sales of land and structures, floating homes are valued using NADA marine appraisal guides and comparable marine sales. Most floating home lenders require a marine appraisal rather than a real estate appraisal. The appraisal, along with the marine survey, forms the basis for the lender's underwriting decision.

The projected market value of a floating home after planned renovations or repairs are completed. Some private lenders and renovation loan programs will lend based on ARV rather than current as-is value, enabling buyers to finance renovation projects that exceed what's possible with current-value lending. ARV lending typically requires detailed renovation plans and a credible contractor relationship.

A large lump-sum payment due at the end of a loan term, rather than the loan being fully amortized over the term. Common in private bridge loans for floating homes — a borrower might have a 3-year interest-only loan with the full principal due at maturity. Requires either repayment from savings or refinancing into a new loan at maturity. Understanding balloon terms upfront is critical when using bridge financing.

A short-term loan (typically 1–3 years) used to "bridge" a gap — either between purchase and permanent financing, or between the sale of one property and the purchase of another. In floating home finance, bridge loans are frequently used when a buyer can't immediately qualify for long-term financing (due to credit, income, or property issues) but wants to close on a home. The plan is always to refinance out of the bridge into permanent financing once the disqualifying issue is resolved.

A loan secured by personal property (a movable asset) rather than real estate. For floating homes, a chattel loan uses the vessel itself as collateral — the lender takes a security interest in the vessel's title rather than recording a deed of trust against real property. Chattel loans are originated under personal property lending standards, not real estate mortgage standards. The terms "chattel loan" and "marine loan" are often used interchangeably for floating home financing, though marine loans are specifically underwritten for vessels. See our comparison article.

The fees and expenses paid at or before closing a floating home loan, beyond the down payment. Typically 1–3% of the loan amount. Include loan origination fees, title insurance (vessel title), escrow/closing fees, marine survey cost, appraisal fee, and recording fees. Unlike conventional real estate, floating home closings may not involve a traditional escrow company — the process varies by lender and transaction structure.

A financing structure where multiple assets are used as collateral for a single loan. For floating home equity access, cross-collateralization might involve pledging both the floating home and real property (a land home or investment property) as collateral, enabling a larger loan or better terms than the floating home alone would support. Available from portfolio lenders and private lenders who can structure non-standard collateral arrangements.

The percentage of a borrower's gross monthly income consumed by monthly debt payments (including the proposed loan payment). Most floating home lenders prefer DTI under 43%, though some portfolio lenders will go to 50% for very strong borrowers. Note: some floating home lenders include the monthly slip fee in DTI calculations, even though it's not technically a loan payment — this can significantly affect qualification.

The portion of the purchase price paid by the buyer from their own funds rather than borrowed from a lender. Floating home lenders typically require 20–30% down, compared to 3–20% for conventional real estate. Required down payment varies by loan type: marine/chattel lenders 20–25%, portfolio lenders 25–30%, private lenders 30–40%. See our down payment guide.

The California Department of Real Estate, which licenses and regulates real estate agents and brokers in California. A DRE license is required to represent buyers or sellers in California real estate transactions. Paul Bergeron's DRE license is #01356345. Roman Bergeron's DRE license is #02439924. Note: a DRE license alone does not authorize mortgage origination — that requires a separate NMLS license.

A ratio used in investment property lending — net operating income divided by total debt service (annual loan payments). A DSCR above 1.0 means the property generates enough income to cover loan payments. DSCR loans evaluate the property's income potential rather than the borrower's personal income, and are sometimes available for investment floating homes. However, most Sausalito floating home docks have liveaboard requirements that limit investment use and make DSCR loans impractical.

Government-sponsored enterprises (GSEs) that purchase conforming mortgages from lenders, package them as securities, and sell them to investors. Their underwriting guidelines require real property with a permanent foundation — floating homes don't qualify. This is the primary structural reason conventional banks decline floating home loans. See our full explanation.

A loan with an interest rate that remains constant for the entire loan term. The vast majority of floating home loans are fixed-rate — the specialized nature of the financing and limited secondary market means the ARM products common in conventional lending are rarely available. Fixed-rate loans provide predictable payments, which is particularly important when the borrower is also paying a variable slip fee.

The hull or floating foundation on which a floating home's living structure is built. The most common types in Sausalito are ferro-cement (concrete), steel, and fiberglass. Lenders underwrite the flotation system as the primary collateral — a compromised flotation system is a loan-killer. Marine surveyors assess flotation integrity as the most critical part of any floating home survey.

A short-term, asset-based loan provided by a private lender (rather than a bank or institutional lender), typically at higher rates and with a focus on collateral value rather than borrower creditworthiness. Used in floating home finance for situations where conventional and portfolio lenders won't lend — credit challenges, unusual properties, or time-sensitive situations. Similar to bridge lending; often used interchangeably in private lending contexts.

A revolving line of credit secured by home equity, structured as a second lien against real property. Conventional HELOCs are unavailable on most floating homes because they require a real property lien. Floating home equity access alternatives include cash-out refinancing (most practical), private second-position loans, and cross-collateralization. See our equity access guide.

The portion of a marine survey focused specifically on the floating home's hull or flotation system — examining structural integrity, corrosion, cracks, and condition of the material (ferro-cement, steel, or fiberglass). A clean hull survey is typically the single most important factor in whether a lender will approve a floating home loan. See also: Marine Survey, Haul-Out Inspection.

An inspection performed after the floating home is physically lifted from the water by a marine crane or travel lift, allowing below-waterline examination of the hull. Required by some lenders for steel-hull homes where corrosion below the waterline can't be adequately assessed in-water. Cost: $2,000–$5,000 beyond the standard marine survey fee. Results are typically required before loan approval for applicable hull types.

Specialized insurance coverage for full-time floating home residents, covering hull, dwelling structure, personal property, liability, and loss of use. Standard homeowner's insurance doesn't cover floating homes on the water. Every floating home lender requires proof of liveaboard insurance as a condition of financing. Annual premiums in Sausalito typically run $3,000–$6,000. Major carriers include Markel, NBOA (National Boat Owners Association), and Lloyd's of London syndicates.

A loan product specifically designed for borrowers who occupy their floating home as a full-time primary residence (liveaboards), as opposed to recreational or seasonal vessel users. Liveaboard loans may offer better terms than general marine loans because the owner-occupant reduces default risk. Some lenders require documentation of liveaboard status (proof of primary residence, mail address, etc.) as a loan condition.

A legal claim against an asset (property or vessel) as security for a debt. For floating homes, a lender's lien is recorded against the vessel's title rather than a real estate deed. First lien position means the lender is first in line to recover their loan amount if the borrower defaults. Second lien (used for equity access) is subordinate and riskier for the lender.

The ratio of the loan amount to the appraised value of the floating home, expressed as a percentage. A $560K loan on an $800K appraised home = 70% LTV. Most floating home lenders cap at 75–80% LTV for purchases (20–25% down). For cash-out refinances, most lenders cap at 70–75% LTV. Lower LTV means the borrower has more equity, reducing lender risk and often resulting in better terms.

A specialized form of chattel financing underwritten specifically for watercraft and vessels, including floating homes. Marine lenders use NADA marine valuation guides and require a marine survey by a SAMS or NAMS certified surveyor. Marine loan terms are typically 15–20 years fixed rate. In Sausalito, the institutional lenders for floating homes are Bank of Marin and a second lender Paul works with directly — both of which use portfolio/marine underwriting for this product. See chattel vs. marine loan comparison.

A comprehensive inspection of a floating home's hull, systems, and structure conducted by a SAMS or NAMS certified marine surveyor. Required by every floating home lender before funding. Covers hull integrity, bilge systems, through-hull fittings, electrical (ABYC compliance), plumbing, and structural systems. Cost: $1,000–$3,000. Survey results determine whether the lender will approve the loan and at what LTV. See our marine survey guide.

A certified professional who conducts marine surveys of vessels and floating homes. Must be certified by the Society of Accredited Marine Surveyors (SAMS) or the National Association of Marine Surveyors (NAMS) for the survey to be accepted by lenders. Paul Bergeron refers buyers to experienced marine surveyors who know Sausalito's floating home stock specifically.

A licensed intermediary who arranges loans between borrowers and lenders, without lending their own funds. Mortgage brokers must hold an NMLS license. Unlike a bank loan officer (who can only offer that bank's products), a broker can shop across multiple lenders to find the best fit for a borrower's situation. In floating home finance, this is particularly valuable because the lender pool is small and relationship-dependent. Paul Bergeron is a licensed mortgage broker (NMLS #399152) in addition to being a real estate broker.

The National Automobile Dealers Association's marine valuation guide — the primary tool marine lenders use to establish the value of vessels and floating homes for lending purposes. Like the Kelley Blue Book for boats. NADA values are a starting point; specific condition, location, slip quality, and amenities adjust the final lending value. Required by most marine lenders as part of floating home underwriting.

One of the two major professional certification bodies for marine surveyors in the United States (the other being SAMS). NAMS certification requires extensive testing and documentation of survey experience. Floating home lenders accept surveys from SAMS and NAMS certified surveyors; surveys from uncertified inspectors are not accepted.

The licensing and registration system for mortgage loan originators in the United States. Any person or company that originates residential mortgage loans must hold an active NMLS license. The NMLS provides consumer transparency — the public can look up any originator's license status, disciplinary history, and employer. Paul Bergeron's NMLS license number is #399152. Working with an NMLS-licensed originator provides important consumer protections required by federal and state law.

Movable property that is not permanently affixed to land. Most Sausalito floating homes are titled as personal property — you own the vessel, but the slip is leased separately. Personal property classification affects financing (chattel/marine loans rather than real estate mortgages), taxation, and transfer procedures. Contrasts with real property (land and structures permanently affixed to it).

Upfront fees paid to a lender at closing, typically expressed as a percentage of the loan amount (one point = 1% of loan). Floating home private lenders commonly charge 1–3 origination points in addition to interest rate. Conventional marine and portfolio lenders may charge 0–1 points. Points paid upfront can sometimes be traded for a lower interest rate, depending on the lender's pricing structure.

A loan held on the lender's own balance sheet rather than sold to Fannie Mae, Freddie Mac, or the secondary market. Portfolio lenders (community banks, credit unions) can finance floating homes because they aren't constrained by secondary-market underwriting guidelines. In Sausalito, the floating home portfolio lenders are Bank of Marin and a second lender Paul works with directly — both offering competitive rates and flexible underwriting for buyers who don't fit conventional mortgage guidelines. See our portfolio loan guide.

An informal assessment of a borrower's likely ability to obtain a floating home loan, based on a review of income, credit, assets, and the type of home being purchased — before a formal application is submitted. In floating home finance, pre-qualification is particularly important because it identifies which lenders and loan programs are available before you write an offer. A pre-qualification from a broker with floating home lender relationships carries more weight than one from a general mortgage lender.

A refinance transaction that changes the interest rate and/or loan term without adding to the loan balance (as opposed to a cash-out refinance). The goal is typically to lower the monthly payment, reduce the total interest paid, or change from a short-term to a long-term loan. Available for floating homes through the same specialty marine and portfolio lenders that fund purchases.

Liquid assets (cash, savings, investment accounts) that a borrower must have available after making the down payment and paying closing costs. Most floating home lenders require 2–6 months of post-closing reserves — enough to cover loan payments, slip fees, and insurance for 2–6 months without any income. Reserves demonstrate financial stability and reduce lender risk. They must be documented via bank and investment account statements.

One of the two major professional certification bodies for marine surveyors in the United States. SAMS certification requires documented experience, written examinations, and peer review. Floating home lenders accept surveys from SAMS and NAMS certified surveyors. Always verify a surveyor's certification before engaging them for a loan-related survey.

The market in which existing loans are bought and sold — primarily by Fannie Mae, Freddie Mac, and Ginnie Mae. Most retail banks originate loans and immediately sell them to the secondary market. Because floating homes don't meet secondary-market underwriting guidelines, they're ineligible for conventional mortgage products. This is why floating home financing runs through portfolio lenders (who keep loans on their books) and specialty lenders (who have their own investor networks).

The monthly payment made by a floating home owner to the marina or dock authority under the terms of the slip lease, for the right to moor the floating home at its berth. In Sausalito, slip fees range from $1,200 to $2,500/month depending on dock and slip size. Some floating home lenders include the slip fee in the borrower's DTI calculation, which affects how much they can borrow. The slip fee is one of the major carrying costs of floating home ownership, in addition to the loan payment and insurance.

The agreement between a floating home owner and the marina or dock authority governing the right to moor the vessel at a specific water berth. Key lender concerns: remaining term (5–10+ years preferred), renewal provisions, termination clauses, monthly fee and escalation, and transfer procedures. A short remaining lease, discretionary renewal, or broad marina termination rights can cause lenders to decline or reduce LTV. The slip lease is often the single most important document in a floating home financing transaction. See our full slip lease guide.

A fitting that penetrates the hull of a floating home for drainage, water intake, or utility connections. Marine surveyors inspect all through-hulls and their associated seacocks as a standard survey item. Failed or non-functional through-hulls are safety issues and loan-blocking deficiencies. The number and condition of through-hull fittings is relevant to lenders evaluating flotation risk.

Legal ownership documentation for a floating home classified as personal property/vessel. Vessel title is held with the California DMV (for smaller vessels) or USCG documentation (for vessels over 5 net tons). A lender's lien is recorded against vessel title rather than as a real estate deed of trust. Title review — confirming clean title with no existing liens or encumbrances — is required before any floating home loan can close.

The process by which a lender evaluates a loan application — assessing borrower creditworthiness (income, credit, assets) and collateral quality (the floating home, slip lease, dock association) to determine whether to approve the loan and at what terms. Floating home underwriting is more complex than conventional mortgage underwriting because it requires expertise in marine valuation, vessel title, and dock/marina assessment in addition to standard mortgage analysis.

See: Title (Vessel Title). Documentation of legal ownership of a floating home classified as a vessel. Lenders take a security interest (lien) against the vessel title, not against real property. The chain of title — history of ownership and any recorded liens — must be clean and clear for a lender to accept the vessel as collateral.