Cohousing-L Mailing List: Financing for coho

[biow (biow]

I'm new to this list, having spent the last year lamenting the 
inactivity on the alt.housing.alternative newsgroup. It's good 
to see a lively, nationwide discussion is going on (as opposed
to the SF area discussion on WELL).

I'd like to poll those on the list who have actually sought or
found financing for coho projects. I've worked as a mortgage 
loan officer, and am active writing sales software for the
industry. Thus, I'd like to hear what mortgage company you 
went through, what type of loan it was (conforming, FHA, VA,
securitized non-conforming, or portfolio).

For those not familiar with the above jargon, conforming loans
are sold by the originating mortgage company (or bank, or loan
broker) to either FNMA (Fannie Mae) or FHLMC (Freddie Mac), which
are government chartered corporations. FHA loans are insured by
HUD and sold to GNMA (Ginnie Mae). VA loans are guaranteed by the VA 
and sold to GNMA. All of the above loans have very tightly specified
underwriting guidelines that might make a loan on coho hard, not least
because the ratio of common property would be too high. Non-conforming
securitized loans are pooled and sold to investors, such as pension
funds. These are normally "jumbo" loans. These also tend to be 
restrictive in everything except maximum loan amount.

It is the last category, portfolio loans, that would offer the
most possibility. These are loans whose capital comes from 
high risk investors. S&L's used to be a source of portfolio
loans, which is a large part of why they went broke. Banks, too,
are quite leary of such loans now, given the number of federal
regulators climbing up and down their backs, trying to prevent
a repeat of the S&L disaster. Note that only in this (rare) type 
of loan may the originating "lender" bear the risk of the loan
defaulting. 95%+ of mortgage loans are *not* held by the originator,
be he a bank or a guy on a streetcorner in a trench coat! The idea
of, "we got our home loan from the bank," is largely a thing of
the past. The bank may just be a front for a local mortgage 
company ("retail broker") which in turn sells the loan to FNMA. 

So it's against this background that we have to go out begging
for coho financing. We don't have a 40-year record of default 
rates that investors want to see. We're "other." Thus, I'm very
interested to find out what sort of loans coho developments have
been able to find.