Mondragon Co-operative Homes Inc. is a housing co-operative located in Brampton, Ontario which has been providing affordable housing since 1983. Mondragon consists of seventy eight townhouse units ranging in size from one to four bedroom units in a beautifully landscaped neighbourhood complete with a park and community room.
Our relationship with Mondragon goes back to 2007 and in that time we have dealt with a number of corporate and member issues. Our relationship has strengthened however in the last few months. Starting in 2011, Mondragon volunteered to participate in a pilot program with Co-operative Housing Federation of Canada and Alterna Credit Union with the support of its property management company, Homestarts, to refinance its existing mortgage with CMHC to provide funding for repair and upgrades to its building envelopes (foundation walls, siding, insulation, doors, windows and roofs) as well as to its furnaces and walkways. We at Iler Campbell were very pleased to be engaged by Mondragon to help with the legal work on the refinancing. Because refinancing is new to housing co-ops, many of the requirements for the new mortgage and the documents that go along with those requirements were unfamiliar to Mondragon. With help from Iler Campbell in early 2014, the board felt comfortable that they understood their commitments. The funding is now in place and the Co op has begun its extensive capital work!
This refinancing was possible, as Mondragon is nearing the end of its 35-year agreement with Canada Mortgage and Housing Corporation, and CMHC was therefore willing to accept prepayment without penalty of the balance outstanding on its mortgage, while still providing rent-geared-to-income assistance until the actual expiry of that agreement.
This is one of a number of options that co-ops are exploring as their operating agreements are about to expire. Stay tuned to this blog for more information about the legal requirements for refinancing and for descriptions of other options for federal co-ops to consider as they approach this new phase, post operating agreement.