|Re: Construction Loan Financing||<– Date –> <– Thread –>|
|From: Paul Conahan (pconahanumich.edu)|
|Date: Fri, 19 Feb 1999 09:00:24 -0600|
>I'll hitchhike on your query and add a question: has anyone found that the project's legal form (coop, condo, limited liability corp., whatever) has been a deal breaker (or maker) from the bank's point of view? At Sunward Cohousing (Ann Arbor), our legal form took the form of a condominium. The bank never explicitly told us they preferred this, but when you are dealing with bankers, the term "radical conservative" is not an oxymoron. Since the vast majority of multi-family developments in our area are condominiums, it seemed prudent to blend in with the scenery as much as possible. Also, in our area, since coops are so rare, getting end mortgages for coops would have entailed using an out of area lender that specializes in coop financing, at a higher interest rate than conventional loans. Also, due to the dearth of coops, coop units would have been difficult to appraise, and appraisers sometimes get conservative (just like bankers) when supporting market data is scarce. This thinking also somewhat influenced our design and building materials, since (using an extreme example) I suspect straw-bale construction would have made our bankers spit up on their polyester suits :-) Paul Conahan Sunward Cohousing of Ann Arbor (where the last of 40 households moved in last November and we have been enjoying common meals for several months now) http://www.sunward.org
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