Cohousing-L Mailing List: RE: LLC vs co-op?

[Rob Sandelin (floriferous]

Lynn, from Rosewind in WA state asked about LLC and Coops.  I would say,
neither are likely to work in this state.

I assume you are adjusting the ownership model of your whole community?

>From conversations with people at Songaia, and other larger communities it
appears that it is very difficult (Ask Songaia about their adventures) in WA
state to find a lender to hold your group mortgage as a coop. Finding a
lender should be your first investigation, since they will be potentially
the bottleneck and assuming you can find one, they may very well have some
restrictions and other issues that might be important to understand before
you make that choice. 

I do not know of an LLC which owns finished housing in Washington, since it
would be corporate ownership and I doubt a bank would fund mortgages with
that kind of ownership since they would have to negotiate foreclosure from a
disadvantage, something which is usually a deal breaker with a bank. They
want clean, clear, easy to assume title on a property they mortgage, and
since portfolio loans are pretty much extinct for large developments, your
loan will have to line up with FannyMae regulations. 

You might want to look up and converse with a couple of mortgage brokers for
advice.  


Rob Sandelin
Naturalist, Writer
The Environmental Science School
http://www.nonprofitpages.com/nica/SVE.htm
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