Cohousing-L Mailing List: Right of First Refusal

[DEL HOLLAND (delholland]

As we were building and selling units, we were on a parallel track trying to 
arrange things with Freddie Mac, Fannie Mae, FHA and the VA, so that buyers 
here would be eligible to get 30 year, fixed rate mortgages.  The VA insisted 
that we must change language in our bylaws that restricted the percentage of 
units in our community that could be rentals at any one time.  Our original 
intent was to allow some rental for special circumstances, for instance a 
sabbatical, but we wanted the community to be filled with people who were 
committed to cohousing, so we put a max of 10% rental clause in our bylaws.  At 
first, I thought the VA’s demand was unreasonable, but when seen from their 
perspective; if we had 9% of community rented and a unit went into foreclosure, 
they might want to be able to rent it while they sought a buyer, I was more 
understanding.  
When we changed the bylaw language, we got VA loan eligibility.

Del Holland
Prairie Hill cohousing, EcoVillage
Iowa City, IA
> Today's Topics:
> 
>   1. Right of First Refusal (Melanie Mindlin)
> 
> 
> ----------------------------------------------------------------------
> 
> Message: 1
> Date: Sun, 10 Dec 2023 09:22:32 -0800
> From: Melanie Mindlin <sassetta [at] mind.net>
> To: cohousing-l [at] cohousing.org
> Subject: [C-L]_ Right of First Refusal
> Message-ID: <2B6F2D63-E9CF-49C7-BC98-95B8127C342F [at] mind.net>
> Content-Type: text/plain;     charset=utf-8
> 
> Our community had a Right of First Refusal in our founding CC&R?s. A few 
> years after move-in, maybe around 2010, one member tried to refinance his 
> home and reported that he couldn?t get it approved because they didn?t like 
> this clause. As a result, we all agreed to remove it.
> 
> I have felt considerable regret about this, and wonder if anyone else has 
> experienced push back from mortgage companies about a Right of First Refusal. 
> Are you aware of legal language that would be less problematic than others?
> 
> Thanks,
> Melanie Mindlin
> Ashland Cohousing
> 
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