Re: Cohousing-L Digest, Vol 79, Issue 1
From: Diana Carroll (
Date: Thu, 5 Aug 2010 09:35:45 -0700 (PDT)
I concur with Sharon.

Whether it is a written rule anywhere or not, I've been working
closely with mortgage lenders for the last 2 years, and all of them
limit how many rental / non-owner-occupied units a development can
have.  The bankers who handle the mortgage process are quite upfront
about it, too.  (Fortunately, of all the problems Mosaic Commons has
had getting mortgages, that particular one has never been an issue.)

Relatedly, lenders want to see that no one entity owns too large a
percentage of the units.  (Sometimes including the developer!  Which
is very frustrating.)

Lots of things can block mortgages even if there's no written rule
REQUIRING they block mortgages.

- Diana

On Wed, Aug 4, 2010 at 11:41 PM,  <juniperjojo [at]> wrote:
> Sharon,
> Can you link to some supportive documentation for your statement that,
> "banks also won't lend on a building that has more than 10% of condo
> units leased."?
> I've heard something similar before, but in extensive online research
> have found absolutely no evidence that this is true, and am starting to
> wonder if this is something of an urban legend/misconception.
> The only regulations I can find are these:
> "The government-backed mortgage-finance company (i.e., Fannie Mae)
> stopped guaranteeing mortgages in condo buildings where fewer than 70%
> of the units have been sold [...]. In addition, the company won't back
> loans for sales in buildings where 15% of current owners are delinquent
> on association fees or where more than 10% of units are owned by a
> single-entity."
> We recently learned that the only limitation on number of leased units
> was that, in order to qualify for a mortgage, no more than 50% of all
> of the units in that development can be rented.
> If you have any different information -- with citations/references,
> please -- please pass it on!
> Jenny Cook
> Great Oak Cohousing, Ann Arbor, MI
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