Cohousing-L Mailing List: Re: Mortgage lenders and cohousing

[Don Benson (benson6451]

Several years ago Wells Fargo, in representing the FHA said that the existence 
of a Right of First Refusal clause would prohibit a loan being offered for any 
unit our development.  Their story was that it could be used to illegally 
discriminate.  We changed our legal documents, obtained FHA certification our 
development, and we have not had any problem with that element since.  The next 
challenge is that our "certification" runs out this fall and we do not know how 
to implement the process for re-certfication.

We do not have a Transfer Fee but do have guest rooms in our common house.  It 
is a challenge for inexperienced owners and buyers and particularly when they 
put their trust in realtors who are often not experienced with cohousing and 
these issues with lenders either.

Don Benson
503.296.7249

On Aug 27, 2012, at 6:14 AM, Lautner, Patricia wrote:

> 
> Is anyone else having problems with lenders?  We found out recently that 
> Chase has put Cohousing on a 'No Go' list and won't provide financing.  We 
> recently had a sale where the buyers were turned down because the word 
> Cohousing in our name apparently triggered what is called  a "Long Form 
> Review" of our condo docs.  Even though we believe we have very standard - 
> vanilla State of MA condo docs, we do have a Right of First Refusal clause, a 
> Transfer Fee clause, and the guest suites are mentioned.  So far three 
> different lenders site one of these mentioned clauses as reason for denying 
> the mortgage (on a high income, dual income, young couple putting more than 
> 25% down!)
> 
> I'm on the Board at JPCohousing and we're considering our options.  Please 
> let me know if you've had any problem like this and what your community is 
> doing about it.
> 
> Thanks,
> 
> Patti
> JPCohousing, Boston MA.
> 
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