Cohousing-L Mailing List: Re: Financing CH, shared facilities?

[Fred H Olson WB0YQM (fholson]

Jim Snyder-Grant Jim Snyder-Grant [at] crd.lotus.com
is the author of the message below but due
to a listserv problem it was posted by the COHOUSING-L sysop (Fred).
****************  FORWARDED MESSAGE FOLLOWS *********************

Our appraiser (well, the bank's appraiser, who we had to pay) paid no attention 
to construction costs of anything - houses or common house.  Instead, he came 
up with appraised value by looking at comparable houses in the area: in terms 
of square feet, bedrooms, attached vs. detached, views, and presence or absence 
of garages. The sum of all the house appraisals was certainly more than the 
construction costs of the houses, but it didn't cover the total of all soft & 
hard costs: land purchase, professional fees, site prep, common house, etc.  
Our construction loan is structured as a revolving loan: we borrow money on an 
agreed on schedule to pay our builder, and our other costs, and we make the 
loan value go down each time we close on a house. The maximum amount we can 
borrow at one time was tied to the sum of the appraisals: I forget the 
proportions, but it was enough so that we can digest money to build the common 
house: although this will be near the end, when enough of the houses have 
closed that we can afford it.

As for how to get an appraiser to recognize the 'value' of living in cohousing 
- we didn't try to fight that battle. He did get some information about Pioneer 
Valley & Pine Street cohousing, just to make sure there wasn't some NEGATIVE 
about cohousing, but he did not attempt to calculate a premium.

Our house prices are based on those appraisals, plus a formula for sharing the 
gap between the sum of the appraisals and the total cost of the development. 
The fact that we are willing to pay for that gap means that we are willing to 
see value that the appraiser did not recognize: but what else is new. Appraisal 
is supposed to be a conservative profession: if cohousing becomes more 
mainstream, the profession will have a firmer basis for adding in a premium, 
and construction and house loans will get a bit easier. Some of the very things 
we got a bit dinged for in the appraisal, such as a lack of attached garages, 
and the presence of attached houses, are positive values for many cohousers.

-Jim Snyder-Grant [at] crd.lotus.com