RE: community financing | <– Date –> <– Thread –> |
From: MinnMal (minnmalqwest.net) | |
Date: Tue, 31 Jul 2001 19:11:01 -0600 (MDT) |
At Monterey Cohousing in Minneapolis, we were able to use inter-group finanacing to get affordable units. We bought a large "mansion"-type building with nearly 3 acres of land in 1992, converted the mansion (actually a very gracious 1924 home for the elderly) into 8 apartment-style units and then built 7 new townhouses which we moved into in 1996. Our original organizational structure was as a cooperative, and the cooperative was both a housing cooperative and the developer of our project. Many of the members who intended to move into the townhouses helped with the initial down payment on the building and land. This was done as loans to the co-op at 8% interest. We got a blanket mortgage on the building and grounds, which allowed the folks who purchased units in the mansion to have different levels (percentages) of down payment for their share purchase price. Many of the units in the mansion are very small, so we could keep the purchase price low. The total of all "mansion" unit prices added up to the sum we paid for the building and grounds. All the owners of units in the mansion had to sign loan guarantees for the blanket mortgage. Other than that, the bank had no concern about individual members' ability to qualify for a mortgage; the cooperative is the entity that individuals repay on a monthly basis, so it was the cooperative rather than the bank that looked at individuals' ability to pay their share of the mortgage. When the new townhouses were built, we priced them at a level that represented our building costs (soft costs plus construction costs) plus a fee for each "lot" (the land under the footprint of each unit) that was roughly equivalent to the total dollars needed to do the renovation of the common space in the mansion. For those of us that had loaned money to the cooperative to purchase the building, we converted the loans into down payments on our townhouses. (I'm simplifying a lot here, but that was the basic idea.) The townhouses are owned as condominiums so we each have individual mortgages. The proceeds from the mortgages gave the cooperative the funds needed to pay off the construction loan plus loans we took out to do the rehab work. Sorry this response is so long -- hope it is helpful to see how the co-op model of financing can be an advantage. (It also helped that we got a real deal on the original property. In effect, we got the building and grounds for what the land alone was worth, as there were few alternative uses for the building and any other developer would have had the expense of tearing down the building before they could have built something else on the property.) _______________________________________________ Cohousing-L mailing list Cohousing-L [at] cohousing.org Unsubscribe and other info: http://www.communityforum.net/mailman/listinfo/cohousing-l
- RE: community financing, (continued)
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RE: community financing Eileen McCourt, July 28 2001
- Re: community financing David Mandel, July 30 2001
- RE: community financing Eileen McCourt, July 30 2001
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RE: community financing Eileen McCourt, July 28 2001
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