Cohousing-L Mailing List: Need help thinking through potential problems with community finance opportunity

[Pare Gerou (paregerou]

For all those financial strategists and out of the box thinkers- what is
your take on this?

Our Greek Village Cohousing Community has chosen a different legal vehicle
from most in the US.  We did this in order to be eligible for subsidies and
loans and tax write offs. We will only know in the future whether it was a
mistake, but for now, it feels like it provides only benefits and still
aligns with the traditional cohousing mission, so we are going for it.
Wish us luck.

Due to our differing legal structure, and due to the fact that there is
more state aid in Europe generally, we have the opportunity this week for
our community to take out a special type of EU and government sponsored
15-year loan at *.*35% (yes- less than 1% interest rate).  This loan does
not need to pay for our construction, as we will finance that in a similar
way to all US communities- bank loans and advance group equity payments,
and all of that traditional finance is paid off by move-in.  So the loan
monies we are thinking of applying for can instead be used, at least in
part if not all, for capital reserve and operational expenses from move in
day 1 - a luxury, and the group can invest this reserve at a higher rate of
return and receive benefit for 15 years before repaying the loan amount.

It seems like a boon for the community and will ensure a good size capital
reserve, money for operational expenses, and a hedge against rising labor
and material costs just in case.

But cohousing is not a commune- we usually do not intertwine our finances
past construction and move in.  This would mean our community, each one of
us, would be part of a community wide loan for 15 years.

The financial benefit seems clear, but what would be the figurative expense
of doing this?  What could go wrong?  And how would it affect us socially
to be jointly liable for loan repayment and investing together for 15
years?  It cannot be hard to make more than .35%, so we will not lose money
but gain it, but at what expense?  We will be 33 households eventually, but
right now die will be cast by our 10 Equity member families.

What are your thoughts about the social impact, and are there things you
feel that could go wrong?  The deadline is coming up, and we need to
decide.  We may not receive the loan or accept it if we are granted it, but
we have to choose to apply or not by the end of the week.

Thanks in advance for reading this and helping us decide about this
opportunity.

Kind Regards,
PARE GEROU
Greek Village Cohousing
T. +1 (434) 962-7801
A. Peloponnese
W. www.GreekVillageCohousing.com
<http://www.greekvillagecohousing.com/>
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