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

[Lautner, Patricia (Patricia.Lautner]

Hi,

I had Eastern Bank say the exact same thing to me.  So I went to a broker and 
they gave me a better rate and the refi went through without a hitch.  I tried 
to 'educate' the bank but in the end they weren't interested in hearing that 
they were mistaken about Frannie.  I believe so far they've lost 4 cohousing 
mortgages in our area for the same reason.  

Fannie Mae doesn't have a problem with cohousing - not according to the refi I 
just completed.  Lots of condos have the right of first refusal clause.

Patti
JPCohousing

-----Original Message-----
From: Lyle Scheer [mailto:wonko [at] monkeyhouse.org] 
Sent: Tuesday, April 24, 2012 1:57 PM
To: cohousing-l [at] cohousing.org
Subject: [C-L]_ co-housing unacceptable to Fannie Mae?!?


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
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