Cooperative Housing Frequently Asked Questions
What is a co-op?
A housing co-op can come in many different
shapes and sizes. The primary difference from other types of housing ownership
is that the buyer is buying shares in a corporation. The corporation owns the
building and the land, and all the members of the co-op are homeowner
shareholders in the corporation with each household having an equal voting
right. The co-op is run by a board selected by majority vote of co-op members. Your
number of shares in the co-op will depend on the size of your unit. However, each unit has one vote.
2. What is the first step to buying a co-operative home at Othello Square?
The first step is to contact HomeSight’s
Homeownership Center and start the eligibility process by providing financial
information. The Homeownership Center staff will work with you to determine if
you are under the income limit for our program—and you can afford the monthly housing cost of the unit within the
program guidelines. They can also work with you to evaluate your credit profile
and assist you with creating a sustainable budget. Once you have completed the process
and have been determined eligible, you will be placed on the purchase ready list.
What is the income qualification?
Prospective buyers’ household incomes must
not exceed 80% of area median income. In 2019, the annual gross income for a
1-person household cannot be more than $61,800, a 2-person household $70,600, a
3-person household $79,450, and a 4-person household $88,250. Larger than 4-person
household information is available. Median income is adjusted each year, so the
limits will likely be higher by the time the project is completed in 2021.
4. How do you decide who will get priority to buy a co-op home share?
A primary list of buyers who have completed all the readiness steps and have
been pre-approved as income eligible buyers will be maintained by HomeSight.
Once this list is full, future buyers will be placed on a secondary list of approved
income eligible buyers.
How is the co-op home share price calculated?
To make becoming a co-op home member affordable
to a broad range of households, we have set the price shares at $50 per square
foot, with the average share price below $41,000.
6. If I do not have the cash for the share price, is there a loan available?
A share loan program will be created to assist in financing a portion of the share price. The details of the loan program have not yet been finalized. Contact the HomeSight Homeownership Center for more information.
7. What is the minimum amount that I must provide from my own funds?
The minimum cash that you have to put
into the share purchase is 20% of the share price. You will also be required to demonstrate
that you can save up to three months of payments. Showing your ability to save
the monthly payments will be a part of the action plan developed with HomeSight’s
8. What can I do in my unit? Can I make changes to the unit?
You can make minor changes such as painting the walls and changing faucets, toilets, etc. Any changes that will involve and/or result in structural changes (opening a wall, floor, or ceiling) will require written co-op board approval and a permit or authorization from the Seattle Building Department before the work can be started.
Any changes that will create noise, vibrations, smoke, odor, or could interfere with the rights of other residents in the building (including the right to quiet enjoyment), will require written co-op board approval before the work can be started.
Keep the unit, all appliances, and
electrical fixtures in a safe, good, working condition. You are required to
maintain, repair, and replace all walls, floors, doors, windows, plumbing,
heating, electrical fixtures, and appliances in your unit.
9. Who takes care of the building and property?
A property management company will be selected by HomeSight to manage the initial period of the building operation. The property manager will be responsible for taking care of all areas outside of your unit, including:
· Lawn care
· Collecting monthly maintenance and building carrying cost from co-op owners
· Paying co-op bills on behalf of co-op owners
· Keeping the co-op’s financial records
· Helping to ensure co-op owners are following co-op rules
· Assisting the co-op board in preparing the annual co-op budget
Once the co-op board is selected and is in place, the board will be responsible for selecting a new management company to take care of these items in the future if the co-op owners decide to change companies.
What is the difference between the building carrying
cost fee and the maintenance fee?
The maintenance fee is used to cover common
shared building expenses such as garbage, water, landscape maintenance, etc.
The building carrying cost fee is used to make payments on the building’s blanket mortgage.
What are the expenses that the maintenance fee
Your individual electricity use,
replacement of appliances in your unit, your phone and internet, individual unit insurance, and other personal costs are not included.
12. How much can I expect my monthly payment to go up on a yearly basis?
The building carrying cost fee should remain at a fixed amount for the term of the building's blanket mortgage loan (typically 30 years). The maintenance fee will be adjusted as deemed necessary by the co-op board. You can expect the maintenance fee to increase with inflation, currently between 2%-3% per year as the cost of services, labor, and materials increases.
Can I rent my unit?
Renting your unit is prohibited as stated in the bylaws. The bylaws are the governing document that spells out the rules for the co-op. The purpose of the co-op is to provide affordable homeownership to income qualified families primarily from South of Seattle neighborhoods. Your unit must be your primary residence and owner occupied.