Re: internal soft second and/or down payment assistance legalstructure??
From: David Entin (
Date: Thu, 22 Jan 2009 17:05:30 -0800 (PST)
Hi Kristen,
   How's it going?
Rocky Hill Cohousing established an Affordability Fund administered by a three-member Affordability committee. Members voluntarily contributed, I seem to recall, around $17,000 and the membership voted $5,000 from our common development budget. We then took applications and made loans to three households to help them afford purchase of their units. They signed agreements with the cohousing association pledging to pay back the loan, without interest, I believe, no later than at point of sale of unit. Hope that's helpful. I know the amounts are not large and housing in Boston is probably considerably more expensive as well.
----- Original Message ----- From: "Kristen Simmons" <simmonskristen [at]>
To: <cohousing-L [at]>
Sent: Thursday, January 22, 2009 8:24 AM
Subject: [C-L]_ internal soft second and/or down payment assistance legalstructure??

I've heard that some cohousing communities have provided down payment
assistance and/or soft second mortgages to some group members as a way to
achieve income diversity. I've also heard of this happen between members of
the group. I've heard of it being structured in a few different ways; my
question is how is this done so that the receiver can still get a
traditional mortgage? What are the legal issues involved?

1. Borrower pays back loan on a monthly basis, same as mortgage. (this
mortgage would be secondary to the main mortgage. would this discourage a
bank from lending?)
2. Borrower pays nothing back until the unit is sold, then the full amount
(plus interest?) is returned? How is this legally structured?
3. lender owns a percentage of the unit, based on the percentage of cash put in. When unit is sold, lender gets same percentage of selling price back. Is
the lender also on the mortgage and a tenant in common?

Thank you,
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