Cohousing-L Mailing List: Re: Affordability w/small homes?

[Rob Sandelin (floriferous]

A glitch we ran into early which still exists for small homes in our area.
The banks would NOT lend construction money for homes that were valued less
than 2.5 times the cost of the lot. So for example,  if your lot cost for
all the community infrastructure was $40,000, then the minimum house they
would give you a construction loan for was $100,000, so the minimum priced
bank financed unit in our development was $140,000 NO MATTER WHAT SIZE it
was. We just ran into this again, only now it is dropped to 2x the lot
because the lots are $80,000. So the minimum bank financed house in our area
is $240,000. This by the way is the pre-construction appraisal cost. So when
you submit your plans you have to show a house that will cost, at a minimum
that much to build.  This sort of kills small houses in our area, since most
people can not afford to build a house without a construction loan. 


Rob Sandelin
Sharingwood Community, Snohomish, WA
Naturalist, Writer
The Environmental Science School
http://www.nonprofitpages.com/nica/SVE.htm
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