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

[Diana Carroll (dianaecarroll]

Oh, a few other things I've learned the hard way:

- I do NOT emphasize the word "cohousing".  I don't hide it but I don't put
it anywhere in writing, such as on the condo approval questionnaire
- do NOT mention meals!!!  If the broker asks about your common dinners,
emphasize that this is not a function of your HOA -- this is residents
organizing amongst themselves to tradeoff cooking.  The meals thing really
tweaks lenders -- because it is reminiscent if a "condo hotel", which are
pretty much unfinancable
- call the common house a "club house".  do not emphasize its community
function...rather, emphasize the great "facilities" it provides to buyers.
- drop all the sales talk about the awesomeness of cohousing: the unlocked
doors, the work weekends, the car sharing, the babysitting co-op.  Focus on
the physical facilities and access to common "amenities".  You don't live
in cohousing, you live in an extremely well-equipped sub-division.

In general, imagine you are a bank, who finds itself in unwilling
possession of a home in your community.  What will relieve your fears?  You
want to be able to own the home without any difficulty, and sell it when
you are ready with even less difficulty.


On Wed, Apr 25, 2012 at 8:48 AM, Diana Carroll <dianaecarroll [at] 
gmail.com>wrote:

>
>
> On Tue, Apr 24, 2012 at 10:20 PM, Lyle Scheer <wonko [at] 
> monkeyhouse.org>wrote:
>
>> However.... shopping around, I'm also getting told I can't transfer my
>> appraisal and that each lender I go to needs to order an appraisal due
>> to new financial regulations, so I'm placing a $400 bet that no red
>> flags will show up every time I go somewhere to try to get a loan.  My
>> current broker says I should disclose the co-housing and right of first
>> refusal issues to new lenders when I go there, but that seems like I'm
>> just asking for trouble.
>>
>> Yikes.
>>
>
> In the last three years, I've helped usher through approximately 15 loans
> for new buyers into our community so I'm something of an unwilling expert
> on this. :-(
>
> First thing I learned is that mortgages go through a series of stages,
> each managed by a different department, and that the usual order is
> application -> appraisal -> condo approval -> underwriting. The appraisal
> costs the applicant money, the underwriting costs the bank money, so
> obviously they prefer this order.  But if you have a broker or loan officer
> you are working closely with, they can be pressured into reversing this
> order, and doing the appraisal closer to the end...thereby saving you $400
> if the condo is unacceptable, or the loan fails underwriting.
>
> Second thing I learned is to be involved in the process closely, and to
> not take anything the broker says too seriously: s/he is a sales person and
> not a financial expert, and doesn't actually make ANY decisions in the
> process, contrary to what s/he will tell you.  I often push for direct
> contact with the underwriting or condo approval folks at the
> lender...sometimes they will allow that to occur, sometimes not.  You can
> spend all day talking your head off with the broker but you are pretty much
> wasting your time there.
>
> Remember: brokers are sales[wo]men.  They can be Allies, but they are NOT
> the Good Guys and they are not on YOUR SIDE, no matter what they say.  They
> are on THEIR OWN side, and will help you only insofar as your interests
> align with theirs.  Maintain a respectful wariness with even the
> friendliest of brokers because they are NOT ON YOUR SIDE.
>
>
> I guess the relevant question for the list would be, has anyone done
>> this process by actively disclosing the uniqueness's of your community
>> and had a lender not blink? Within the past year?
>>
>
> Yes.  This is exactly what I've learned to do.  When a new buyer comes in,
> with a new broker to work with, I get on the phone with that broker right
> away and lay the situation out exactly.  I explain that we have been turned
> down for fannie-mae non-compliance and he should verify that this mortgage
> will pass fannie mae before asking my buyer for a cent.  Mostly the broker
> ignores me -- gives me lots of nice-nice talk about how he's sure it will
> be fine blah blah -- but until he's actually given the details to the
> underwriting department, I know he's full of crap.
>
> So far, as far as I know, we've gotten almost all our loans as "portfolio
> loans", meaning that the lender keeps the loan and does not sell it to
> fannie mae or on the secondary mortgage market.  These loans have somewhat
> higher interest rate, but are easier to get.  Talk to small, local banks,
> ask them up front if they do portfolio loans, explain why you need them
> ("fannie mae gives us crap") and go from there.
>
> Diana, reluctant amateur cohousing financial expert
>