Cohousing-L Mailing List: Re: Mortgage referrals for construction lender due diligence

[Dahako (Dahako]

Hi -
 
This list has discussed what phrasing in certain elements of the condo  
association documents (bylaws and covenants, especially) that lenders need to  
see 
before they can be comfortable making loans.  In working with BB&T  in North 
Carolina and in Maryland, they were especially interested in the resale  clause 
(which may include a carefully worded "right of first refusal" clause,  but 
needs to be otherwise free-market mainstream to encourage full lender  
enthusiasm).  Check the archives for other advice - my recollection is that  
Rob 
Sandelin got going on this topic at least twice.
 
One thing lenders love about cohousing, and I think it is the reason that  
BB&T seems to look for cohousing deals, is the percentage of  pre-sales.  A lot 
of condo building has been done on spec for the last four  or five years and 
now lenders are tightening up a lot.  Cohousing does not  build on spec - it 
builds for a group of interested purchasers who have  typically put down some 
membership money, signed an agreement to put in their  time and more money 
later, and demonstrated their creditworthiness some way  (like getting 
prequalified 
for a loan).  If your group has not done these  things, do them.  They are 
easy and they make lenders happier.
 
Jessie Handforth Kome
Eastern Village Cohousing
Silver Spring, Maryland
"Where we are having long drawn out discussions about cleaning our common  
spaces."