Cohousing-L Mailing List: co-housing unacceptable to Fannie Mae?!?

[Lyle Scheer (wonko]

Hi all,

    I'm going through a mortgage process, and hit an underwriter who is
telling me, "the project is unacceptable to Fannie for two reasons right
off the bat.  One, the project is a Co-Housing Community and second [has
a right of first refusal clause]"

    The second one I've heard others on this list have trouble with, and
I'm working to clarify that it's only a 30 day right of first refusal
and then reverts to sale to any 3rd party... see if that flies.... work
with my community to amend our CC&Rs quickly if not.... I also thought
we had language that let banks off that particular hook, but can't find
it at the moment.

    However, it's the first bit that truly startles me.  Does Fannie Mae
really find co-housing in general unacceptable?  Has anyone ever gotten
that back from an underwriter?  Really?

    I'm fighting back on that one by trying to state very clearly that
we're incorporated as an HOA, and that we follow HOA rules... all our
legal documents talk about a board of directors and votes for exactly
this reason.  (NO... we're not co-housing, we're an HOA)

    However, I'm curious to anyone within the past couple of years where
the underwriters are getting very picky because of the financial state
of loans, has anyone run into the "can't Fannie Mae because you're
co-housing" and successfully argued back and how you did it.  Just
looking for more ammo in my particular somewhat urgent situation.  I
just find it hard to believe Fannie Mae universally is blocking
co-housing... if that were truly the case this would then be a call to
arms email of what we can do nationally to fix co-housing's general
image with Fannie mae.  Personally I just think it's a worried
underwriter, but that's also an issue.

- Lyle