Re: FHA approval: yes or no?
From: Chris ScottHanson (
Date: Mon, 29 Sep 2014 11:43:05 -0700 (PDT)
At Fifth Street Commons in Langley WA we decided against getting FHA or Fannie 
Mae approval. At first it seemed to make sense even though it was rather 
expensive. The professionals we talked to suggested that it would cost us about 
$5000 altogether to get approval.

Our intent was to provide government sponsored mortgages for lower income 
members. In the end we decided that the government controls and restrictions 
were too expensive ($ and socially) and that it was more cost-effective to 
provide affordable housing assistance internally through our own down payment 
assistance and second mortgages etc. from existing members. 

It seemed to be a difficult decision at first with the pros and cons relatively 
balanced. Then we discovered that the approval from Fannie Mae and FHA would 
limit or eliminate our ability to own a rental unit specifically set aside for 
affordable housing. We had set up our community, a 16 unit project, with one 
rental unit owned by the other 15 homeowners. We really believe in this 
strategy and we were being told we would have to eliminate the rental unit, and 
that our homeowners association would not be allowed to have income from a 
rental unit.

So we didn't do it, we did not apply.

The result - we're very happy we did not seek Fannie Mae and FHA approval and 
we did not have to comply with their demands.  We have successfully worked with 
a number of members who needed special financing arrangements.

If anybody wants my list of 12 internal financing programs to strengthen 
affordable housing in community, please let me know and I will send them to you 

Chris ScottHanson
(206) 601-7802

> On Sep 29, 2014, at 10:47 AM, Ken Winter <ken [at]> wrote:
> *I'm forwarding this note from the person who honchoed our getting FHA
> cert.*
> *~ Ken, Sunward Cohousing*
> Sunward Cohousing decided about 3 1/2 years ago to go for FHA
> certification.  The cost was $1600 for the lawyer plus the effort of
> amending our Bylaws and getting all the info together.  The Bylaws
> amendment brought them a little more into agreement with state law but
> mostly gave mortgage holders a few more rights.  Renewing approval last
> year was easier because I knew how to get the needed info together for the
> lawyer (cost $1000).
> I do not know if anyone has actually used the low down payment feature
> yet.  I found it convenient when preparing information for mortgage
> companies for prospective buyers to be able to cite our FHA project number
> as evidence of financial stability.  I am not aware of any disadvantages
> from FHA certification.
> Bob Bailey
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