Cohousing-L Mailing List: Separate Financing of Common House and Individual Homes

[Thomas Lofft (tlofft]

Michael Stinson msserd [at] ntid.rit.edu wrote: 
Subject: [C-L]_ Separate financing of common house and individual
        units?

Our Flower City Cohousing community  in Rochester, NY would like to know about 
separate financing for the common house and the individual homes in the 
community, and would appreciate any pertinent information.  A developer with 
whom our  community has been meeting has expressed a preference for this 
financial arrangement. The Cohousing Handbook by Chris Hanson states that some 
choosing communities have separate financing of the common house and individual 
homes.

Thanks,
Mike Stinson
Flower City Cohousing Community
 
In Liberty Village, each home buyer financed their own home with a combination 
"construction-perm" which combines with their deposit to provide the front end 
cash to complete purchase of their lot that gives them the collateral for the 
lender. Thereafter, during the construction period, draws are released monthly 
to pay the builder of the home; upon completion and receipt of the certificate 
of occupancy and lien release from the builder, the debt is rolled into the 
permanent mortgage. 
 
Our original 27 acre improved land site acquisition was completed by a 
partnership chartered as an LLP (Limited Liability Partnership) with equity 
cash and a one year ARM (Adjustable Rate Mortgage). Within that first year, the 
property was subdivided to sell off a historical 1753 Manor House and 
outbuildings with 4 acres and a development loan was opened with a local bank 
to finance site development and infrastructure. In due course, the development 
loan is paid down from lot sales and the partnership will extend the 
development loan to construct the Common House, projecting loan payoff from 
final lot sales. If there were enough pre-sales (75% or more) it might be 
possible to get your lender to fund both the infrastructure and the common 
house in the initial development budget. 
 Cheers,
Tom Lofft
Liberty Village, MD