Income-to-Rent Ratios for Mobile Home Park Applications

The 3x-monthly-rent rule was designed for apartment underwriting in the 1990s. It survives because it's easy to remember, but it doesn't fit the MHP applicant pool — too many of your good applicants don't have a clean W-2 to point at. Here's how to set an income-to-rent standard that's defensible, fair, and actually predicts who'll pay rent.

Why 3x doesn't fit MHP

Apartment 3x assumes a W-2 income, two-week pay cycles, and a $1,500–$2,500/month rent. Mobile home park lot rent at $400/month with a 3x rule means you need $1,200/month — a number that excludes a meaningful slice of fixed-income retirees who can absolutely pay $400/month and have done so for years.

More importantly, the 3x rule lumps gross income with net income, doesn't distinguish a 1099 contractor from a salaried employee, and treats Social Security identically to a sales commission. None of those are equivalent.

A better framework

Set the floor at 2.5x net income for fixed-income sources (Social Security, SSI, pension), 3x gross for W-2, and 3.5x gross for self-employment / 1099 income. Tie the verification standard to the source: bank statements for fixed-income, pay stubs for W-2, last-year tax return + YTD bank statements for 1099.

The reason for the higher self-employment ratio isn't snobbery — it's that 1099 income is lumpier and the safety margin should be larger. A ratio that varies by income type is more defensible than a single number applied to dissimilar applicant streams.

Handling cash-economy applicants

There's a meaningful slice of MHP applicants who are paid in cash. They're often the best-paying tenants you'll have. The risk is verification: don't accept a self-attested figure. Three months of bank statements showing consistent deposits is a defensible standard. A notarized employer letter is an acceptable secondary.

What you don't do: deny on the basis that the applicant doesn't have a W-2. That's a path to a disparate-impact claim and you'll lose it.

Document the standard, then apply it identically

The income-to-rent standard belongs in the same written criteria sheet as your credit score cutoffs. One document, one version, applied identically. Variance gets documented with the reason, on the application file. Audit yourself quarterly.