Cohousing-L Mailing List: FHA/FNMA project approval

[Hungerford, David (dghungerford]

On 6/10 Judy Baxter asked about FHA/FNMA etc approval war stories

We spent hundreds of man-hours on this stuff, but that doesn't mean we 
learned a lot.  Since you're in California, you might be able to do what we 
did, and that is to go with CHFA (California Housing Finance Agency.)  
However, the only advantage we found there was that we could get a lower 
interest rate (8.675).  That is somewhat irrelevant now.  Observations:
1)  FHA, CHFA and other programs designed to facilitate "affordable" housing 
often come with burdensome, if not ridiculous requirements.  For example, FHA 
requires home sites to be soaked with termicides--something we wouldn't do.  
Do you have members who can't come up with 20% down?  If not, then you don't 
need the Fed programs (by the way mortgage insurance for <20% down loans is 
usuriously expensive, say $3500 for a 70K loan.  Try to find a way to get 
those downs up to 20%
2)  Don't most lenders "bundle" their loans on the 
secondary mortgage market, whether they're bought by some alphabet agency or 
Weyerhauser? 
3) Rather than a "consultant," try talking to a few mortgage brokers about 
loan packages.  It does appeal to these people to essentially do the 
paperwork once, and then get paid for it 10, or 20 times.  Let them wade into 
the quagmire for you.
4) If you have to do the construction loan, try talking to a bank about a 
rollover provision which would allow your group to save points at conversion 
from construction to home loans.
5) good luck, I empathize with you guys at this stage.

David Hungerford
Muir Commons, Davis CA
dghungerford [at] ucdavis.edu