We understand that financing for intentional communities can feel daunting for founders. We hope the following resources and tips can help. In addition, see our Consultants page for finance and realty specialists.
Most groups planning an intentional community face a similar huge hurdle in their quest for affordable housing that accommodates themselves and the people they care about. Below are some options communities have used for the lease or purchase of their building or land.
Financing Community Real Estate Without Loans
- Group-financed: An individual or group with land, who creates a legal land trust, can distribute or sell shares of ownership to others. This can offer a viable option to create group ownership with low-cost implementation. A primary investor or original owner could hold title, but with a legal document that divided the ownership trust. The article by Horowitz in the Further Reading section below discusses joint purchase of land in Canada that can be subdivided.
- Community land trusts: A non-profit entity can own the land upon which housing units are built, and sell or rent the units on top of it at affordable rates. A homeowner can sell and recoup their initial investment, but would not get a profit if the land value had increases. Instead they would receive some set percentage of interest on their initial investment.
- Retirement-financed: If parents use retirement funds to make a down payment or full payment for a joint purchase of real estate, it could be co-owned by the parents and their children. The investment would be more secure than many types of retirement funds, because it would be backed by land rather than subject to market fluctuations. However, definitely hire a lawyer to set this up. This option can make the land subject to debts of the children if not done correctly. There are also a fair amount of tax downsides to co-owning land as opposed to passing the land to the child. Property law generally creates rights that don’t favor co-ownership, unless you or your lawyer publically files an owner agreement.
- Grant-funded: While organizations with non-profit status are eligible for a greater number of grants, some grants are available to community groups or businesses. Our grant writing consultants specializing in financing for intentional communities may be able to help you identify some you are eligible for and fine tune your applications.
Financing Community Real Estate With Loans
- National Cooperative Bank: NCB provides loans to serve the needs of U.S. cooperatively owned business operators, socially responsible independent retailers, cooperative housing units, and non-profits.
- Seed Commons: A community wealth cooperative with a principle of non-extraction, meaning the lender won’t get a higher return than the borrower does
- Credit union financed: Credit unions or small local banks are sometimes more willing to take a risk on locals. Some lenders are willing to manage a multiple-owner loan, called a mixer mortgage or fractional mortgage. The lender holds the title as the loan gets repaid. The members who contributed to the down payment, would each have their share of payment to make, and their share of ownership. If a decision were later made to dissolve the IC, the land could be resold. Investors would likely get all or part of their investments back. However, the co-owners could be personally liable for amounts they cannot pay if they decide to sell at a point that the value of the land has diminished.
- Peer-to-peer (P2P) financed: For joint real estate purchase, for investment or co-housing, see sharetini.com. Their profiles are organized by location. You might reach out to people on their platform to suggest they join IC match to assess compatibility if they are looking for a cohousing situation. Alternatively, some simply want to share in the purchase as an investment, rather than live there.
- Business-funded: Vocation-based ICs may be able to secure low-interest business loans to purchase a residence for employee housing. Operating costs could also be covered.
- Title company loan: You may find a title company willing to co-own the title. The residents with shares might rent and make payments as a rent-to-own arrangement. Hiring a lawyer ensures that security laws are complied with, which are often complicated.
Short Term Strategies for Beginning Founders
Jointly rented house: This guide from an expert can help you find a good value on the rental market, make adaptations to increase occupancy, and persuading a landlord to rent to your group.
Contracted emergency timeshare: Intentional communities adjacent to but not within metropolitan areas may consider offering disaster relief temporary shelter as a contracted prepaid service. While this may not be sufficient for full financing for intentional communities, it could cover partial costs.
Grants: Team up with a certified non-profit, local municipality, school, or religious institution as an umbrella organization under which you can apply for additional grants. Offer the umbrella organization a cut, which they will expect. This link contains many grants lists and tips.
Crowdfunding: Some communities have purchased land with individual donations, some less than $10, based on a vision that others resonate with.
Further Reading
Hoeschele, W. (2018). The economics of abundance: A political economy of freedom, equity, and sustainability. https://www.routledge.com/The-Economics-of-Abundance-A-Political-Economy-of-Freedom-Equity-and/Hoeschele/p/book/9781138383371
Horowitz, B. (2021). How to co-purchase and thrive on a land share. https://issuu.com/cowichanvalleyvoice/docs/april_2021_issue_149_web
Phil. (2020). Co-buying property with friends: Learning to love the process. https://supernuclear.substack.com/p/co-buying-property-with-friends?s=r