There are some initial filing and legal costs, the current plan is to fundraise to cover these.
There are several stages to the development process, each will require financing.
The first is presentations to prospective members, an admission fee will cover the costs of the presentation.
A member loan to the development co-op will provide working capital to cover overheads and startup costs for the development of projects. Current plan is this will be $2,000.
Enough working capital to build the project is expected to come from short term fixed rate Community Bonds.
The housing co-op long term financing has two sources, member loans and long amortization period mortgages.
The housing co-op member loans are covered by the development co-op member loans plus an escrow account each member will be required to have.
The mortgages will be financed through a finance co-op which will sell variable rate bonds and provide matching mortgages. The current plan is these will initially be Community Bonds, but as things scale up the terms should eventually become market rate.
The current pricing plan for these is a monthly coupon that is the CPI change in the previous month plus a fixed premium, currently expected to be 2.25%. This is my current understanding of the premium required to match 6% mortgages in a 2% inflation environment.
These bonds could have terms that match the amortization period but they are not expected to be particularly liquid so shorter terms (5 years?, 1 year?) would be required to reduce the liquidity premium.