Cohousing-L Mailing List: Re: Affordable Cohousing

[Catya Belfer-Shevett (catya]

Sadly, we have no say in these numbers - the formula goes like this:
"The prices of the homes have been set based on a formula from the state 
that calculates what sales price a family making 70% of Area Media 
Income can afford if they pay approximately 30% of their monthly income 
on housing expenses such as mortgage, condo fees and taxes. The formula 
presumes a down-payment of 5% for the mortgage, and the household must 
qualify for a mortgage for the remainder of the home price."

I'm not sure whether they calculate it off the 1 person household or 2 
person household, though.

        - catya

Brian Bartholomew wrote, On 5/5/2008 11:31 AM:
> >     * $136,500 for a 1 bedroom home
>
> >     * $46,300 [max income] for a single person
>
> Playing around with mortgage calculators on the web, using a 5% down
> payment and 8% interest, it seems to me a loan on this combination of
> debt to income is overcommitted and cannot be bought.  Could this be
> correct?  I imagine that no one in a coho would want to construct a
> financial situation which guarantees the residents are in over their
> heads, as this would be 'predatory lending'.  What am I missing?
> Is there a planning assumption that other coho members will donate
> towards a larger down payment?
>
>                                                         Brian
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--
Catya Belfer-Shevett   ~   webmaster, www.cohousing.org
www.catya.org   ~   Cohousing in MA! www.mosaic-commons.org