|Re: Affordable Cohousing: Sections 1 - 3||<– Date –> <– Thread –>|
|From: Chris ScottHanson (cscotthansonmac.com)|
|Date: Tue, 17 Feb 2015 10:12:57 -0800 (PST)|
A SELECTION OF IDEAS FOR CREATING MORE AFFORDABILITY IN YOUR COMMUNITY [submitted to cohousing-l in weekly installments, for comment and input.] The strategies outlined in the series to follow have been collected over the past 20 years of doing cohousing projects across the US and Canada. Many of the strategies outlined below are what I call Internal Banking. These “internal banking” relationships are magical when they happen, and it would seem they can only happen when there is a strong sense of community, and trust. _____________________________________ 1. Internal Down Payment Assistance Assisting with the necessary downpayment, required by the primary mortgage lender, is done in a number of ways. A revolving Community Loan Fund can be established with funds from members of the group who have available assets to invest within the community. This can make those assets available directly to other individual households within the community, or to a cooperative fund. For this purpose it should be administered by a volunteer group within the community, normally a finance committee, or an affordable housing sub-committee of the Finance Committee. Some groups arrange to have a third party administer this fund. 2. Outside Down Payment Assistance In addition to the internal banking there are sometimes external down payment assistance programs available for specially qualified buyers. If you think you have members who may qualify you may want to ask for more information about these programs and/or help with research the current possibilities. As always, qualification will be based on making a commitment to being a part of the community. 3. Second Mortgages In addition to down payment assistance, sometimes it can make sense to get a Second Mortgage. The two primary ways this is done are through; a. Second Mortgage loans – direct, one member to another, above board, and visible to the primary mortgage lender. Some banks can provide a second mortgage, often at a much higher interest rate than the first mortgage. b. Silent Second Mortgage loans – direct, one member to another, below the visibility of the primary mortgage lending bank. This allows the borrower to appear to have a larger down payment, allowing them to borrow more from the bank than would otherwise be able to offer. Since this is frowned on by the official bank lenders you may need to move this money to the buyer’s savings account months in advanced to allow the money to “season” in that account. _____________________________________ Chris ScottHanson (206) 601-7802 > On Feb 11, 2015, at 9:51 AM, Chris ScottHanson <cscotthanson [at] mac.com> > wrote: > > > Affordable Cohousing > > A SELECTION OF IDEAS FOR CREATING MORE AFFORDABILITY IN YOUR COMMUNITY > [submitted to cohousing-l in weekly installments, for comment and input.] > > You’re probably tired of hearing about smaller units, standardization, simple > unit plans, modest finishes, all with the goal of achieving more > affordability. Well it’s true, these all help, but there are other > affordability strategies that are based on interpersonal relationships, > community, and trust, that can be just as effective, if not more so. > > The strategies outlined in the series to follow have been collected over the > past 25 years of doing cohousing projects across the US and Canada. Many of > the strategies outlined below are what I call “internal banking.” These > internal banking relationships are magical when they happen, and it would > seem they can only happen when there is a strong sense of community, and > trust. > > Each of these has been used successfully in one project or another. The vast > majority of cohousing projects that have been built in North America have > included a number of internal banking elements which have allowed members > with some resources to assist members with more limited resources to > participate in the community. > > There are two primary ways of purchasing your home in cohousing. In the > simplest form, these are: 1) an all cash purchase, or 2) a mortgage from a > bank, usually requiring some downpayment from the purchaser. The mortgage is > called a “take out loan” by the construction lender because it takes them > out, paying off their loan to build the project. > > Your cohousing group can adopt some or all of the following strategies for > achieving a measure of affordability within your project. Some of these > strategies work for some people. Others work for other people. Some of > these strategies need to work together. It all depends on needs, > circumstances, pride, personal relationships, trust, liquidity, risk > willingness, risk aversion, and/or time sensitive financial needs. > > 1. Internal Down Payment Assistance > 2. Outside Down Payment Assistance > 3. Second Mortgages > 4. Co-purchase Options > 5. First Time Buyers > 6. The Reduced Monthly Condo Fee Subsidy. > 7. Maintenance Reserve Reinvestment > 8. Unit Price Buy Down > 9. Design for Affordability - Capital Costs and Operating Costs > 10. Shared Units > 11. Community Owned Rental Unit > 12. Participating Nonresident Owners > 13. Purchase of One or More Units by an Outside Affordable Housing Entity > > In the coming weeks I will submit to cohousing-l an explanation of each of > these strategies. I hope, if you’re interested, that you will comment, edit, > expand or help explain how each of these strategies can contribute to making > cohousing more affordable, to more people. Share your stories and we can add > them to the shared wisdom. > > > Chris ScottHanson > Urban Cohousing Associates, Inc. <http://www.urbancohousingassociates.com/> > Land Acquisition, Development Consulting & Project Management > Ecovillages, Cohousing & Sustainable Communities > > Fifth Street Commons <http://fifthstreetcommons.com/> > PO Box 1288 > Langley, WA 98260 > > (206) 601-7802 cell > > Author of: The Cohousing Handbook - BUILDING A PLACE FOR COMMUNITY > Available from Amazon.com new, used and as an eBook. > > _________________________________________________________________ > Cohousing-L mailing list -- Unsubscribe, archives and other info at: > http://www.cohousing.org/cohousing-L/ > >
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