What Floating Home Lenders Actually Look For

Floating home lenders evaluate applications differently than conventional mortgage lenders. Understanding their criteria helps you prepare a stronger file and avoid surprises. Here's what they're actually looking at.

The Borrower

Every floating home lender starts with the borrower — your creditworthiness and ability to repay.

• Credit score: Minimum 680 at most lenders; best rates at 740+. Some portfolio lenders will go to 660 with a larger down payment.
• Debt-to-income ratio: Under 43% preferred; some lenders go to 50% for very strong borrowers. Remember that the slip fee is an ongoing obligation — some lenders factor it into DTI even though it's not a loan payment.
• Income stability: Two years of consistent income documentation. Self-employed borrowers need two years of tax returns showing stable income; employees need W-2s. Large income variations year to year raise questions.
• Reserves: Most lenders want 2–6 months of post-closing reserves — liquid assets beyond the down payment and closing costs that could cover payments if your income disrupted.

The Property

The floating home itself is the collateral, and lenders scrutinize it carefully.

• Hull type and condition: Ferro-cement (most common in Sausalito), steel, and fiberglass all get different underwriting treatment. A marine survey documents condition. Lenders want to see sound flotation with no critical deficiencies.
• Age: Most lenders have maximum age cutoffs — typically 40–50 years — though a well-documented, recently renovated older home may still qualify.
• Systems: Electrical (ABYC compliant), plumbing, bilge, shore power connections — all reviewed in the marine survey. Critical deficiencies can kill a loan approval until repaired.
• Square footage and livability: Some lenders have minimum square footage requirements. The home needs to function as a full-time residence.

The Slip Lease

The slip lease is often the most important document in a floating home loan application — more important to many lenders than the home's condition.

• Remaining term: Lenders want at least 5 years, ideally 10+ years remaining. A lease expiring in 2–3 years is a serious problem for most lenders.
• Renewal provisions: Is there a right to renew? On what terms? Indefinite lease rights are better than discretionary renewals.
• Termination clauses: What can cause the slip to be lost? Lenders don't want to hold collateral that could be rendered valueless by a marina decision.
• Fee escalation: Some lenders limit the annual percentage increase in slip fees they'll accept.

The Dock Association

Lenders increasingly pay attention to the dock association's financial health — similar to HOA review for a condo purchase.

• Reserve fund adequacy: Is the dock association financially solvent? Does it have reserves for infrastructure maintenance?
• Pending special assessments: A large upcoming assessment can affect a buyer's ability to afford the home.
• Governance: Well-run, financially stable dock associations are preferred collateral environments.

Why a Broker's Presentation Matters

A floating home loan application isn't just about meeting criteria — it's about how your file is presented to the lender. A broker who has placed dozens of floating home loans knows how to frame complex income situations, explain unusual hull types, and contextualize slip lease terms in ways that underwriters trust. This presentation layer is the difference between an approval and a decline that shouldn't have happened. Talk to Paul before you apply.