Cohousing-L Mailing List: Shovel-ready cohousing neighborhood in Virginia needs financing ideas

[Thomas Lofft (tlofft]

Peter, 
 
I'm unclear about this request.
 
Do you need development financing to complete the infrastructure and site 
improvements, or are these completed now?
 
Or, do you need construction financing for building homes and common house?

In that case, have your construction drawings been through plan review and 
permit approval?
 
Or both?
 
Typically, on a raw land development project, one lender will make a 
development loan based on a maximum loan to value of 50% to complete 
infrastructure and all site improvements, based on equity in the property and 
personal guarantees by credit worthy owners or other guarantors.  They will 
require a first deed of trust security in the property.
 
Once all site development permit approvals and public sector bond releases are 
completed, than a series of construction loans may be initiated on a home by 
home basis, guaranteed by each respective contract home purchaser.  Only a very 
strong national corporate credit guarantee could get you a blanket construction 
loan for over twenty homes. 
 
I recommend using a local lender that is community based, not a mega-national 
lender with several levels of out of state committee reviews.  Without 
question, it's easiest and most successful to look for this financing as close 
to the project as possible. A local lender want to have all your residents as 
future customers, understands the property values in the local market, knows 
who all the residents' employers are and the sustainability of those employers 
who are paying the wages that will repay the loans, etc.  Out of state lenders 
are more resistent to finance anything that's not a replica of something 
they've already made money on.
 
Best wishes,
 
Tom Lofft
Co-Founder, Liberty Village
Director, Mid Atlantic Cohousing


Peter wrote:

 Date: Thu, 02 Jul 2009 07:05:06 -0400
From: "Z. Peter Lazar" <peterlazar [at] gmail.com>
Subject: [C-L]_ Shovel-ready cohousing neighborhood in Virginia needs
your financing ideas
To: cohousing-l [at] cohousing.org
Message-ID: <4A4C9462.4080401 [at] gmail.com>
Content-Type: text/plain; charset=ISO-8859-1; format=flowed
 
Hi Extended Neighbors,
 
For those of you energized to help spread cohousing as a cause, I'd like
to ask you for some simple assistance where a few moments of your time
could make a very big difference in completing a 26 home cohousing
community.
 
Blue Ridge Cohousing is looking for a bank or other creative lending
body for construction financing. We've checked with the
cohousing-friendly banks listed on this listserv, but they loan money
only in other parts of the country than Virginia.
 
Can any of you recommend a bank or other institution that is either in
Virginia or willing to lend in Virginia? Perhaps there might be some
"Angel Investors" willing to invest in this project? It is a mature and 
sound project (low risk) and I'd be happy to give many details upon request.
 
In summary, we are an established and energetic group of prospective
cohousers with a beautiful fully-rezoned property near Charlottesville
Virginia. We have an approved site plan, approximately 70% presales
($10K commitments) and a very experienced builder that built Shadowlake
Village Cohousing and Elderspirit. The cohousing neighbors have put
over $500K cash into the project to buy the land. Unfortunately, our
Plan A of having our builder obtain the construction financing is not
working (we were ready for a loan just after the global financial meltdown).
 
This should be a simple thing in normal times due to our 70% presales
and strong development partner. But we're having problems finding a
bank that will loan money on reasonable terms.
 
Can you help out Blue Ridge Cohousing as well as the cohousing cause by
providing some names and resources that I could follow up with?
 
thanks,
 
Peter


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