Cohousing-L Mailing List: Re: Financial data base descr...

[Rob Sandelin (robsan]

Joanie asked:
> At Doyle Street, no one knows anything about the income and assests 
situation of
>other residents. I guess in other cohousing communities everyone knows (or
>can know?) about each others assets. Which is more common? Iin what other
>contexts is this information shared, and why or why not?

I have heard of several developing cohousing groups which "pre-qualify" 
members in a condifential way to determine whether or not they have the 
financial wherewithall to afford a mortgage.  In my opinion, the 
earlier you figure this out, the more opportunities you may find 
creatively finance stuff.  Some mortgage assistance programs have 6-9 
month lead times, a govt grants, well that's a whole another ball park 
which can take lots and lots of time and papers.

I know for example at Puget Ridge this was done very confidentially by 
the project manager.  It was not onerous (at least from what I have 
heard).  When you do a build it all at once type project you will need 
to know your assets, as the banks typically require a substantial 
percentage of investment before they give the A & D loans. (A&D means 
acquistion and development, it is a typical loan a developer gets to 
buy the land and start the development).  The group may have to come up 
with several hundred thousand dollars without a whole lot of notice so 
having someone know the total available assets of the group can be 
pretty helpful.   In some cases, the banks require as much as 30% 
developer investment in the whole capital project.  That means, for a 2 
million dollar project the group would have to show $600,000 of 
investment. The funds you collect and spend on the project for site 
design, land studies etc. can often count towards this amount so be 
sure to keep excellent records of what you spend, when and to whom the 
money went.

There is a  description of the whole loan process in the 1995 Cohousing 
Resource Guide, and I can pull out that stuff and send it to you if you 
are interested.

Rob Sandelin
Sharingwood