Re: Re: Membership sale agreement questions
From: Stephen Hawthorne (hawthornacpub.duke.edu)
Date: Tue, 19 Apr 94 15:08 CDT
In order to qualify for Nat Coop Bank's loan for mixed income housing
coop, we have to have a majority of members whose income is equal to or
less than 85% of the local annual median family?1;2c?1;2c income.  Based on
the
county the land is in, that's $32,200.  But that's a poor rural county and
our members live and work in the two larger metropolitan counties so we
should be able to include those figures and average the three.

We have been told to expect to come up with 30% out of pocket and that
they will finance 70% of appraised value.  Self-Help isn't set up to do
construction loans but will give us a poermanent mortgage, making it
easier to get a construction loan since it's payoff is guarenteed by the long
term mortgage.

Lenders in this area aren't excited about financing condos since they were
tremendously overbuilt here and aren't selling.

We are building in phases, Phase 1 is roads, pond repair, wells and a
community septic system, and probably 4 houses.  Members of the phase 1
group are getting together their financial statements and their house
plans.  We're considering strawbale construction, so some of it will be
owner built.  When we have that all together, Blue Heron Corp will start
the loan process with Coop Bank.  I'll keep you posted.  Thanks for the
feedback.

Stephen for Blue Heron


 On Mon, 18 Apr 1994, Rob Sandelin wrote:

> Stephen Hawthorne writes:
> 
> >We've been dealing with the Self-Help Credit Union in Durham. and they
> >take us quite seriously, and are starting to deal with the Nat.
> >Cooperative Bank in Wash, DC.
> 
> Incorporation is one way to get a good bank review. Other ways are by 
> having purchase/sale agreements in hand for substantial number of the 
> proposed units,  Doing a pre-qualification screening based on banks 
> criteria so you can show that the members will likely qualify for 
> loans, and having contracts with a seasoned construction development 
> firm.  It also helps if you can show a good appraisal valuation (The 
> appraisal value being greater than the construction cost).
> 
> It would be interesting to know if cooperatives are required to put up 
> a larger percentage of downpayment than a condominium project.
> 
> I would be intersted in hearing about how things work out with the 
> National Coop Bank, either good or bad or indifferent.
> 
> Rob Sandelin
> Puget Sound Cohousing Network
> 


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