Frequently Asked Questions

Can the GAV Inc. Bylaws be changed after we vote to permanently adopt them? Yes. They can be changed as stated in the GAV Inc. Bylaws under Article V as follows: F. The Bylaws of the Corporation and the Community Rules can only be adopted or repealed by at least a majority vote of the total Membership of the Corporation. G. The Bylaws, Community Rules and all additional policies adopted by GAV Inc. Board of Directors e.g. Member Lease, Non-Member Lease, Additional Household Member Policy, etc. may be amended by a majority vote of the Members present at any regular or special meeting at which a quorum is present, provided that notice of the proposed amendment will be given in writing to all Members not less than twenty (20) days prior to such meetings. After the twenty (20) day notice, technical changes in wording or detail of the proposed amendment that do not alter the subject matter will not require an additional notice. Are we, as homeowners, personally liable for the mortgage of GAV? No. Nobody living in this GAV community will have a personal responsibility for the mortgage as a whole. The corporation is responsible for the mortgage. If individual residents don’t pay their lot rent, similar protocol is followed as what happens now under C.U.T’s ownership. Various steps will be followed to help the Member get back on track with lot rent. These steps are outlined in various documents including the GAV Inc. Community Rules, the Member Lease Agreement (found under 4th Board Meeting) and the Past-Due Rent Collect Policy (found under Fifth Board Meeting). Why would we want to consider ROC USA Capital to be a lender? GAV Inc. is starting out as a brand new entity. Because of this, it can be very difficult to find lending from banks. Almost all lenders would only give, at most, 75% of the required amount. ROC USA Capital provides up to 110% LTV (loan-to-value). Beyond this, ROC USA Capital also provides construction loans in the case of necessary repairs to infrastructure for example, in our community. Is ROC USA Capital a reputable, trustworthy lender option? Yes they are, and here’s why: There are currently 291 communities in the ROC USA network. Within these 291 communities, there are over 20,000 homeowners. ROC USA Capital provided the financing for 100 of these Resident Owned Communities. ROC USA Capital has a success rate of 100%. That means they have never foreclosed on any of their borrowers and none of their borrowers have ever filed for bankruptcy. Why does our GAV Inc. Corporation have to start out with a balloon payment loan? Because we are receiving a commercial loan rather than a residential loan. Commercial loans are standardly shorter, averaging 5-10 years, as compared to residential real estate loans which average 30 years. ROC USA is offering us a 10-year commercial loan, but is willing to amortize it as if it were a 30-year residential loan in order to reduce our monthly payments and to make the loan as affordable as possible. Why aren’t commercial mortgages, like what GAV would get, long term like they are for residential mortgages? Commercial mortgages don’t have the same backing from GSEs (Government Sponsored Enterprises, e.g. Fannie Mae, Freddie Mac, etc) that allow resident mortgages to be 30 year term loans. There is interest rate risk to the lender for holding a loan that long which is why so many commercial mortgages are shorter term (typically 5-10 years). Thanks to the good work of organizations like ROC USA, this may be changing in the future. Can GAV Inc. refinance before we reach the balloon payment? Yes. We can refinance with the same or different lender at any time the corporation Membership decides it is the right time. Standard refinancing fees would apply. With some lenders there is a prepayment penalty for refinancing before a certain time limit, e.g. 5 years. ROC USA Capital does not charge prepayment penalties. However, there is a chance that a potential loan participant will charge these penalties, but we will not know until we close and know who the participant will be. In the case that a loan participant does charge prepayment penalties, then we would have to wait the time period (e.g. 5 years) to avoid that penalty when refinancing. Is there any possibility we would not find refinancing and the corporation would be stuck with the balloon payment? This has never happened before in the history of Resident Owned Communities. If we happened to be that non-existent exception, ROC USA Capital would work with us to find a solution. A potential solution may be extending the timeline of our current loan. Will a bank be more likely to loan money on a mobile home if we become a resident owned community? Yes. ROC USA Capital has partnered with a few credit unions for them to lend on homes in ROCs. Credit Unions are co-ops, non-profit, and member-owned institutions so they have seemed more willing to work with the ROC model and make small loans for individual homes. It depends on the state and how the manufactured home is titled, but typically these are “chattel” loans rather than “mortgages”. Who will hold the title for the land? GAV Inc. will be the owner of the land and holder of the title. Members of GAV Inc. will own a share of the cooperative, which will own the land.