Cohousing-L Mailing List: Re: Construction Loans

[Linda Hobbet (coho]

At Village Hearth, which moved in mid-2020, our purchase prices were 
locked when we joined the LLC. At that time we put down 20% of our 
purchase price which funded costs such as marketing and the down payment 
on the construction loan (you can't normally get a 100% loan). That 20% 
eventually became the down payments on our personal homes. We could have 
needed to increase the home prices if there were unexpected additional 
construction costs. Our development consultant built a 10% exigency fund 
into our budget, which prevented home price increases in spite of some 
significant unexpected needs.

Though home prices didn't increase, mortgages on the individual home 
were done by the purchasers after construction was complete at current 
rates, which is no different than purchasing any other home. We paid off 
the construction loan as the homes were sold.

Linda Hobbet

On 6/21/2022 3:28 PM, T G wrote:
> I am curious how construction loans work with cohousing developments. Are
> rates for the individual owners locked in before construction starts or
> after they assume the loan for their individual unit upon occupancy. With
> mortgage rates recently going up, how does that affect final home prices vs
> initial estimates?
> --
> VillageHearthCohousing.com
> 706-202-7178
> coho [at] lindahobbet.com