|RE: Multi Family Strawbale Housing||<– Date –> <– Thread –>|
|From: Daniel Nachbar (nachbarworld.std.com)|
|Date: Thu, 24 Oct 1996 08:22:54 -0500|
As a practical matter, convincing your banker is not sufficient. Almost all mortgages are "resold" via the Federal National Mortgage Association (abbrev - FNMA, stock ticker FNM, pronounced "Fannie Mae"). De facto, FNMA sets the rules. FNMA is the proverbial 800 pound gorilla for home loans. Assuming you wish to do anything that is not "approved" by FNMA, your financing options will severely limited. As a result, the homes will be much harder to sell because potential buyers can not go to just any bank for a mortgage. They will have to stick with those banks that 1) understand what you are doing and 2) have room in their portfolio for your this particular mortgage, and 3) haven't made more than a handful mortgages in your community already -- banks need to stay diversified. To make matters worse, construction lenders almost never lend money for a project that isn't pre-approved by FNMA. Potential construction lenders want to see a clear path for having the homes sold at the end of construction. No FNMA, no clear path. For our group, the issue was minimum size of homes. We had several buyers who were single people who wanted very small homes. FNMA has a minumum size (in square feet). Insanely, we had to INCREASE the size of these homes to make it possible for the buyers to get a mortgage. Of course, you can always try to get FNMA to change its policies or make an exception. But, I've never heard of it happening. You have a long way to go. Pick your battles wisely. Dan Nachbar Pioneer Valley CoHousing nachbar [at] world.std.com PS -- I've mentioned mortgages. Almost all of the same restrictions apply to co-op share loans as well.
- Multi Family Strawbale Housing Sarah Kerr, October 21 1996
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