Re: FHA Approval
From: Ann Zabaldo (
Date: Mon, 31 Mar 2014 12:03:39 -0700 (PDT)
Hi all —

Following this thread is certainly interesting!  Like working my way through a 
maze …

Now I hear we’re talking about three different things:

1.  FHA loans
2.  Conventional mortgages
3.  Construction loans

Oh yes … and if we go back to a connecting thread … denial of a reverse 
mortgage …

As I understand it, FHA loans are federally insured mortgages given through 
conventional lenders.  FHA simply guarantees the loan.  Someone w/ more 
experience can clarify this for this list.

Conventional mortgages such as the “take out” mortgages for condo or coop sales 
or a resale of a detached home is the mortgage  you could get walking into 1st 
Acme Bank.  

Construction loan is part of the development package put together by your 
developer (which may be YOU.)  A professional developer brings money, 
experience and expertise to the table.  If she or he is not bringing these 
three things to the table then you need to think carefully about who IS 
bringing them to the table.  An experienced developer will come w/ a budget 
plan not only for pre-development and construction but also the mortgages for 
the buyers of the units.  Otherwise, he/she could end up w/ a beautiful project 
and no ability to sell it.  If people can’t get mortgages they can’t buy.

Both Takoma Village Cohousing and Eastern Village Cohousing in DC and MD 
respectively were built w/ “cohousing” in the name.   The developer made sure 
he had the “take out” mortgage financing at the same time he had the 
construction loans.

There has been at least one case at Eastern Village where a resident trying to 
refinance w/ the same bank that held his mortgage was denied refinancing 
because “cohousing” was present somewhere in the documentation.    The bank 
demanded proof that the project was a condo overlooking the fact that the condo 
docs given to the bank CLEARLY state Eastern Village Cohousing Condominium.  
And then had all the verbiage about EVC being a condo under Maryland law, etc. 
etc. etc.

I think this kind of thing is due to:

1. Ignorance — that’s why I appreciate Sharon’s position on facing the issue 
head on
2. Inability to read or fear of making a deduction based on reading:  it says 
“condo.” Maybe it’s a condo …
3. Fear — real estate is very conservative.  Don’t do anything out of the 
ordinary …
4. Overwork
5. An immediate excuse not to make a loan
6. Regional “norms”

Takoma Village Cohousing has had four resales since that issue w/ Eastern 
Village noted above.  Two were for all cash but two were not.  Both sailed 
through no problems.

I understand things in other parts of the country are very different than here 
in DC.  It’s unfair to compare DC w/ Nebraska, Alabama, Nevada or California. 
We’re our own little bubble unto ourselves.  Sometimes I think I live in a 
wholly different solar system.

But … just for what it’s worth … sharing my experience in this market.

Best --

Ann Zabaldo
Takoma Village Cohousing
Washington, DC
Principal, Cohousing Collaborative, LLC
Falls Church VA

On Mar 31, 2014, at 2:23 PM, Kay Wilson Fisk <kwilsonfisk [at]> 

>>>> In the meantime, I would still recommend keeping "cohousing"
> out of your formal legal name it you want access the competitive
> mortgage rates.
> Agreed. In our case, we were only able to find one bank in our
> county willing to give us a construction loan, and that was only
> because, while they were very nervous about the "cohousing"
> label, they "worshipped" our construction contractor, who had
> developed the highly successful Poulsbo Place.
> Unless you have truckloads of cash, FHA loans won't do you any
> good without a construction loan!
> Kay Wilson
> Meadow Wood Condominium
> AKA Meadow Wood Cohousing
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