Re: Development Financial Structure/David Mandel read this...
From: Elizabeth Stevenson (
Date: Mon, 18 Nov 2002 23:54:01 -0700 (MST)
I'm hoping David will reply to this, since I wasn't big on the financial end
before move-in.

But it's doable. We had everything built and paid for without having
everyone putting in 5 grand at the third meeting. Although I think I
actually did!

Some of the members put in far more than the minimum amount, and that gave
the group more flexibility. I think some people paid in installments. The
membership was tiered according to your investment, so that the people who
put in more got money back on their investment at a higher rate, and were
paid back first (I think). We also had financing from the city to help the
low and moderate income buyers, so they weren't all having to come up with
the entire down-payment. This was in the form of silent second mortgages
from the HRA. No payments until you refinance, sell, or ten years, whichever
happens first, but interest accrues, and you have to pay back increased
value of the house proportional to the loan.

Liz Stevenson
Southside Park Cohousing
Sacramento, California
tamgoddess [at]
> From: "Rob Sandelin" <floriferous [at]>
> So how to pay for:
> Land option: (Usually a minimum of 10% of the asking price to hold it for a
> year, often way more)
> Architects work: Concept through construction permitable drawings,
> $10-40,000.
> Legal Work: Group incorp, land purchase contract: $5,000
> Permit work: Infrastructure cost, Hearings, fees, Varies wildly with
> municipality.
> ???????????????????????????????????
> In order to get any bank loan, at least as far as I know, you have to have
> ALL these things done, because you must have a building permitable project
> before the bank will loan you a dime. So who pays these costs if its not the
> core group? Its either the core group membership or a developer. Or is there
> some other options that I have not heard about yet? There was a scheme at
> one time where relatively high priced "bridge" loans were available from a
> couple of sources. Do these still exist?
> Real estate development is NOT free, and usually its not cheap or easy
> either. If you want to create a process to ask for money in a humane way
> that makes tons of sense, but every once in awhile I have met up with
> forming cohousing groups who seem to believe in magic, that somebody will
> come along and  pay for their project for them and they will not have any of
> the risk. Maybe some of the developer driven groups have accomplished this,
> but I can't imagine why a developer would do this myself. Cohousing seems
> like such a wacky thing from a conventional profit motive sort of thinking.
> And of course, a developers profit then has potential to add to the costs
> some, but if that's where your startup money comes from, you have few
> choices.
> Community attracts a fair number of dreamers. Sometimes a few of these
> dreamers with no funds can find or create a situation where they can buy
> their first home. And sometimes they can't. Its a sad thing to say goodbye
> to a potential neighbor, especially one you really like, because they can't
> get a mortgage or don't want to put themselves in dire financial straits by
> taking a high stakes mortgage.
> Rob Sandelin
> Sharingwood
> -----Original Message-----
> From: cohousing-l-admin [at]
> [mailto:cohousing-l-admin [at]]On Behalf Of Catya
> Belfer-Shevett
> Sent: Monday, November 18, 2002 7:01 PM
> To: cohousing-l [at]
> Subject: RE: [C-L]_Development Financial Structure
>> thanks for your financial comments.  How can we change this to
>> include lower
>> middle income  even if not the poor?
> We have a membership structure that requires a 5% downpayment from equity
> members - we have a standard schedule for how long it should take to reach
> that number, but families can make individual arrangements with the finance
> team as needed for their circumstances.
> We also have a strong associate status, so people who aren't sure if they
> can afford it or not can stay in that role as needed.
> All of this stuff is on our website:
> - catya
> ____
> Catya Belfer-Shevett      ____\  /      Interested in
> catya [at]           \  / \/      Cohousing in MA?
>              \/
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