Why
"cooperative" housing?
Cooperative
housing allows families to invest in and benefit from the
place they call home. Because each household owns a share
in a "cooperative corporation" that in turn owns the property,
all resident households-and only resident households-collectively
own and manage their property.
How Does a Housing Co-op Compare with Other Housing?
 |
| Condo
ownership. Everyone owns a divided piece of
a property-they own only everything inside of their
own unit, to the "back of the paint." |
Co-op ownership.
Everyone owns the property together, and makes
decisions about the property based on what they feel
is best for the whole community. |
Renting.
A building owner owns the entire pie, and charges tenants
to live there. Tenants own nothing. |
The economic and
social benefits of cooperative homeownership compare to,
and sometimes surpass, conventional single-family homeownership:
Affordability. Since there is no longer a third party building
owner profiting from the property housing cooperatives are
often more affordable than rental housing. Furthermore,
buying a share in a co-op is usually less expensive than
buying a conventional home, and closing costs and down payments
are generally much lower. Long-term, fixed-rate mortgage
financing, operations at-cost, and group-purchasing can
make co-ops even more affordable for families.
Wealth
Creation. Co-op owners enjoy all the benefits
of conventional homeownership, including mortgage interest
deductions, favorable property tax treatment, and homestead
tax treatment-all of which build financial assets for individuals
and stabilize the community as a whole.
Skill-building. By serving on a co-op board or committee,
volunteering for co-op activities, or attending membership
meetings, resident-owners build valuable skills-such as
financial management, critical thinking, and conflict resolution-that
can help them land a job or achieve a promotion.
Pride
in Ownership. Co-op owners feel a sense
of pride in and responsibility for their property and the
surrounding neighborhood. Public spaces tend to be well
cared for in neighborhoods with housing co-ops.
Personal
Safety. Co-op owners tend to know their
neighbors. Co-ops create a social network that can increase
independence for senior citizens, broaden available child
care options for parents, and decrease crime rates.
Civic
Participation. Co-op owners have greater
control of their own destiny by democratically controlling
monthly housing charges, building improvements and repairs,
and other projects. Since they are comfortable with democratic
processes, Co-op owners are also more likely to vote in
local elections, serve on local committees, and participate
in other activities that benefit the community at large.
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Can
I get a loan to buy a share in a co-op?
Yes! Individuals
can get share loans (also called "co-op mortgages" or "co-op
loans") to finance the purchase of their share in a housing
cooperative. This is a service that most traditional lenders
don't offer. Visit our Cooperative
Home Loans page or call (612) 331-9103 for more information
on how you can access these funds. If you are looking for
a housing co-op to join, visit www.coopliving.coop
for listings.
Can
a housing co-op get a loan as a whole?
Yes! Housing co-ops
can get loans from NCDF for acquisition or rehabilitation
of a property through NCDF's Commercial Loan program. Visit
our Commercial and Business Loans
page or call (612) 331-9103 for more information on how
housing co-ops can access these funds.
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What
kinds of co-ops does NCDF develop?
Cooperatives take
many forms. They can be 1) market rate, increasing in value
according to the general housing market, or 2) "limited
equity," meaning that steps are taken to ensure that the
co-op stays affordable for a long time. Beyond that, housing
cooperatives can take just about any form you can imagine-artist's
lofts, low-income housing, and more. At NCDF, we have concentrated
our efforts in the following areas:
Manufactured
Home Park Cooperatives. Residents
in manufactured home parks are among the most vulnerable
to steep rent increases, sub-par infrastructure, and displacement.
NCDF can help residents cooperatively purchase their parks
and gain control over the property and their quality of
life. Two manufactured home parks have become cooperatives
in Minnesota in the last year, and plans are underway to
convert several more in Minnesota and Wisconsin.
Rental
Conversions. Residents living in traditional
apartment buildings can organize to purchase the building
when a property owner puts it on the market.
Low-Income
Housing Tax Credit (LIHTC) Conversions. As
many LIHTC properties reach the end of their 15-year affordable
housing requirement, NCDF is helping residents to organize
and cooperatively purchase their LIHTC properties-ensuring
that their housing will remain affordable for a long time.
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How
else does NCDF help co-ops?
Access
to Capital. We provide secondary financing to housing
co-ops to purchase residential property, and help them secure
primary financing, grant funding, and other sources of capital.
Budget
Development. We help new co-ops develop
and maintain a sustainable operating budget that is consistent
with the co-op's financial goals.
Feasibility
Studies. We conduct preliminary research
into suggested cooperative housing projects, evaluating
their financial and structural feasibility to ensure that
resident purchase is a sound investment.
Due Diligence.
We assess site infrastructure, appraise properties,
and conduct phase I environmental assessments to ensure
that a potential housing site is a sound investment for
its residents.
Navigating
the Legal System. We can assist cooperatives
with complicated legal documentation and processes, and
help them find independent representation.
Organizational
Development. We help resident organizations
form cooperatives as a legal entity, create governing boards
and committees, develop cooperative rules and bylaws, and
increase capacity for effective meetings, conflict resolution,
and financial planning.
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About
the Housing Department
With over 30 years
of collective experience in affordable housing and cooperative
development, the Housing Department has already closed projects
totaling more than $7 million. Future plans include senior
housing co-ops, manufactured home park co-ops, and expiring
LIHTC conversions.
Grounded in NCDF's
tradition of community investment, the Housing Department
is committed to the development of affordable, sustainable
housing options for families in the Midwest. We use our
expertise to give burgeoning cooperative communities the
access to capital, technical assistance, and governance
training they need to thrive.
To learn more
about general cooperative housing development, please contact
Warren Kramer, Director of Housing Development, at (612)
767-2116 or warren@ncdf.coop.
This institution
is an Equal Opportunity provider. Discrimination is prohibited
by Federal law.
