Pennsylvania Code & Bulletin

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The Pennsylvania Code website reflects the Pennsylvania Code changes effective through 52 Pa.B. 6342 (October 1, 2022).

10 Pa. Code § 39.4. Inventory financing.

§ 39.4. Inventory financing.

 Any association, after having complied with the provisions of §  39.2 (relating to Motor Vehicle Sales Finance Company License) and complying with the following requirements and conditions, may invest in mobile home chattel paper which finances the acquisition of inventory by a mobile home dealer:

   (1)  The inventory is held for sale by the dealer in its ordinary course of business in the association’s regular lending area.

   (2)  The monetary obligation evidenced by such chattel paper shall be the obligation of the mobile home dealer and may not exceed the following amounts:

     (i)   100% of the manufacturer’s invoice price of each new mobile home.

     (ii)   100% of the invoice price of the manufacturer of any new equipment to be installed by the dealer in a mobile home.

     (iii)   75% of the fair market value of each used mobile home (including any installed equipment).

   (3)  The maximum term of each inventory loan shall not exceed 90 days.

   (4)  In the event a dealer is not able to sell the merchandise within the term of the original inventory loan, the loan may be renewed for successive 90 day periods, but no renewal shall extend beyond 12 months from the date of the original loan.

   (5)  Upon each renewal of any inventory financing, the dealer shall be required to pay all interest to date together with a 10% curtailment of the principal. An association may waive the requirement for a curtailment payment if the renewal occurs in the month of December, January or February.

   (6)  Disbursement of inventory loans shall be based on the original copy of the manufacturer’s invoice, which invoice shall be retained in the association’s files. Disbursement shall be made directly to the manufacturer or to the manufacturer and the dealer jointly.

   (7)  If the inventory financing for a particular dealer does not generate retail mobile home loans within a reasonable time, such financing shall be discontinued.

   (8)  No inventory or retail mobile home financing shall be transacted with any dealer until the board of directors of the association have formally approved such financing.

   (9)  An association may share the financing charges with any or all dealers through the operation of a dealer reserve whereby a percentage of the finance charge is set aside in a reserve account at the time each loan is made or purchased. The purpose of such reserve shall be to help to absorb losses and any amounts not so used shall be paid to the dealer periodically on a contractually agreed percentage basis.


   The provisions of this §  39.4 amended April 25, 1980, effective April 26, 1980, 10 Pa.B. 1661. Immediately preceding text appears at serial pages (21350) and (2015).

Cross References

   This section cited in 10 Pa. Code §  39.6 (relating to retail purchase money financing).

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