Cohousing-L Mailing List: Re: Economic support in cohousing

[David L. Mandel (75407.2361]

I'll add a little detail about the formal loans we have made to members:

About a year ago we decided to assess homeowners for some transitional tax and
insurance bills that probably would have been paid by the construction entity if
it hadn't run out of money. The amount was at least several hundred per
household; for some larger units as much as $7-800. And some people simply
didn't have it. So we decided to offer loans from our reserve fund at prime rate
for those who needed it. Seven households did, and they had the choice of
setting fixed monthly payments they could afford or a term of their choice with
a maximum of two years. 

These are unsecured loans, so we're assuming the risk that someone might skip
out. So far no one has, and three of the loans have been entirely repaid. 

Sometime soon we'll discuss in our administrative cluster then decide at a
general meeting whether we want to make emergency loans from our reserve a
permanently available feature here. If we do, we'll probably set a maximum
amount per loan as well as a maximum total that can be owed at any one time.
Plus we'll have to try to define criteria for eligibility. The positives, aside
from the spirit of mutual aid, are that even at prime rate, the interest on the
loans is a better investment for our reserves than the CDs or money market funds
we otherwise use. (What do other established communities do with their
reserves?) 

Totally separate from all this, I'm aware of a half dozen or so other informal
loans of significant size that have been made from member to member, mostly
around crunch time when we were closing our purchases. None became problematic
as far as I know. While these were strictly person to person, the existence of
our cohousing community surely made them more likely to occur, I think.

David Mandel, Southside Park Cohousing