Affordable Cohousing: Sections 4 - 6
From: Chris ScottHanson (
Date: Wed, 25 Feb 2015 09:43:00 -0800 (PST)
[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.

4. Co-purchase Options
For most cohousing groups, there are buyers who find that it is feasible and 
more affordable for them to co-purchase their new home with another person or 
another household.  Having common facilities and a strong sense of community is 
often what makes this possible.  Sometimes the other party is another home 
owner within the community, and sometimes they are external friends or family.  
And sometimes the co-purchasers will occupy the new home together - sometimes 
called “tenants in common.” In either case, the ownership is shared, the 
proceeds of the sale of the home is also shared if and when it is resold.  

5. First Time Buyers
There are first time buyer mortgage programs that could help those who qualify 
by either reducing the down payment requirements, or possibly even eliminating 
the requirement for a down payment.  If you think you may qualify, please ask 
for more information about these programs.  Qualification will always be based 
on making a commitment to being a part of the community.

6.  The Reduced Monthly Condo Fee Subsidy.
Adopted by some cohousing communities, the idea here is that banks will grant 
mortgages based on the following formula: your total housing costs = mortgage+ 
taxes+ insurance+ monthly condominium fees may not exceed x% of your gross 
annual income.  If the condominium fees are removed or reduced, the bank can 
give the home buyer a slightly higher mortgage.  Over the years, the total 
mortgage costs will remain the same, but because of inflation costs, the 
home-owner's income will usually rise, so that gradually, the homeowner can 
afford to pay the condominium fees.  The removal of $150 in condo fees will 
allow the buyer to qualify for something like $20-30K more mortgage, often 
enough to allow a young family to buy that extra bedroom they need.  If 
structured correctly, the cost to each of the non-subsidized households is only 
a few dollars each month in the initial year and may be reduced to zero in 5 to 
10 years.

Members may apply for a temporary removal of the monthly Coho (or Condominium) 
fees in order to qualify for a higher mortgage. Starting from the initial 
granting of the subsidy, the Coho fees will gradually rise, e.g.:  a) in 5 
annual steps of 1/5 of the regular fees.  After 5 years the member pays regular 
dues, or…  b) in accordance with member's ability to pay, if member provides 
the Dearborn Commons Coho Business Association with income documentation.

Chris ScottHanson
(206) 601-7802

The list of 13 strategies:
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

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