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

[Holly McNutt (holly.mcnutt]

Hey Coho-land,

Being in real estate and knowing a little about lending, I want to chime in 
with my wee bit of experience here.  When we bought in 4.5 years ago, lending 
guidelines were much more lenient, and even then my mortgage broker cautioned 
us that it might be trickier to get a loan. He had worked on loans here at 
Nyland before, so I knew to trust him on this.  He advised leaving the word 
"cohousing" out of the paperwork as much as possible because LENDERS DO NOT 
LIKE TO FUND ANYTHING DIFFERENT.  Our appraiser used the word "community" which 
is pretty generic.  He did NOT expound on everything that is special and 
wonderful about this place and this experience, just wrote it up like it was 
any other HOA. And it worked!   

That being said, it's sooo much harder to get a loan now and the level of 
scrutiny is very high.  There is no way an underwriter isn't going to notice 
something like that.  And I"m not saying someone applying for a loan should try 
to hide the fact that we're coho.  I'm just saying that even 5 years ago, it 
could raise an eyebrow and probably it raises more now.

I am VERY interested to know if that is accurate about Chase's policy.  We ALL 
know that cohousing loans are probably MORE secure than the average, borrows 
are much less likly to walk away from a home in a coho community, but don't 
expect an underwriter sitting in an office to get that at all.

I like Sharon's idea.

My two cents!

- Holly at Nyland


On Aug 27, 2012, at 11:32 AM, Sharon Villines wrote:

> 
> 
> On Aug 27, 2012, at 11:00 AM, Lyle Scheer <wonko [at] monkeyhouse.org> wrote:
> 
>> I did some investigation and the lawyer who helped us remove the clause
>> told me that recently a bunch of "reforms" were put in place for the
>> mortgage industry in order to prevent a duplicate of the crisis that
>> were very poorly thought out. 
> 
> I just did a quick search online. Articles in the NYTimes and the Washington 
> Post, and blogs on housing are all reporting serious reforms in requirements 
> for _banks_. They detail what banks have to do to prove they aren't deceiving 
> borrowers or giving mortgages that can't possibly be repaid. 
> 
> I didn't see anything that would affect cohousing or condominiums as such but 
> it sounds like banks are wary of any loans that anyone would say they 
> shouldn't have made, and thus get fines or the mortgages cancelled without 
> payment because they were unfairly awarded.
> 
> I think it may be time for the national organization to get legal counsel to 
> sort this out. Or a task force of lawyers living in cohousing.
> 
> The seriousness in some areas and lack of problems in others indicates that 
> the problem is not federal regulations but local interpretations of them. The 
> task may not be to go after them for discrimination but provide information 
> that assures them that they would be acting in accordance with federal 
> regulations when they loan to cohousing groups that are legally constituted 
> as required by law in their jurisdictions. 
> 
> No one even has a litmus test for cohousing. And Chase thinks it knows what 
> it is? They should tell us their definition so we know who we are.
> 
> Sharon
> ----
> Sharon Villines
> Takoma Village Cohousing, Washington DC
> http://www.takomavillage.org
> 
> 
> 
> 
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