|Financing for coho||<– Date –> <– Thread –>|
|From: biow (biowcs.UMD.EDU)|
|Date: Mon, 15 Nov 93 17:49 CST|
I'm new to this list, having spent the last year lamenting the inactivity on the alt.housing.alternative newsgroup. It's good to see a lively, nationwide discussion is going on (as opposed to the SF area discussion on WELL). I'd like to poll those on the list who have actually sought or found financing for coho projects. I've worked as a mortgage loan officer, and am active writing sales software for the industry. Thus, I'd like to hear what mortgage company you went through, what type of loan it was (conforming, FHA, VA, securitized non-conforming, or portfolio). For those not familiar with the above jargon, conforming loans are sold by the originating mortgage company (or bank, or loan broker) to either FNMA (Fannie Mae) or FHLMC (Freddie Mac), which are government chartered corporations. FHA loans are insured by HUD and sold to GNMA (Ginnie Mae). VA loans are guaranteed by the VA and sold to GNMA. All of the above loans have very tightly specified underwriting guidelines that might make a loan on coho hard, not least because the ratio of common property would be too high. Non-conforming securitized loans are pooled and sold to investors, such as pension funds. These are normally "jumbo" loans. These also tend to be restrictive in everything except maximum loan amount. It is the last category, portfolio loans, that would offer the most possibility. These are loans whose capital comes from high risk investors. S&L's used to be a source of portfolio loans, which is a large part of why they went broke. Banks, too, are quite leary of such loans now, given the number of federal regulators climbing up and down their backs, trying to prevent a repeat of the S&L disaster. Note that only in this (rare) type of loan may the originating "lender" bear the risk of the loan defaulting. 95%+ of mortgage loans are *not* held by the originator, be he a bank or a guy on a streetcorner in a trench coat! The idea of, "we got our home loan from the bank," is largely a thing of the past. The bank may just be a front for a local mortgage company ("retail broker") which in turn sells the loan to FNMA. So it's against this background that we have to go out begging for coho financing. We don't have a 40-year record of default rates that investors want to see. We're "other." Thus, I'm very interested to find out what sort of loans coho developments have been able to find.
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