Finances

Where Does the Money Go?

This document describes the money flow for members of COUCH. The numbers are based on tentative budgets, but are approximately correct.

COUCH

For all members (residents of Brooks, Harvest, and Phoenix), 5% of your room charge (‘rent’) goes to COUCH. Most of this money is allocated for vacancy reserve, which is used in case of a vacancy at one of the co-ops. A small amount (about 10%) of the 5% is used for COUCH overhead, advertising costs, etc. The details of COUCH's overhead and internal budget are available on the finance web page.

Phoenix

For members of Phoenix, the remaining 95% of your room charge goes to Eric Herzog, the landlord. COUCH has no control or knowledge of how it is used.

Brooks and Harvest

For members of Brooks and Harvest, the remaining 95% of your room charge goes to NASCO Properties. The money goes to the following expenditures:

Debt service (mortgage payments): 56%
Property taxes: 10%
Insurance: 8%
Utilities (sewer only): 1%
Maintenance (major, minor, reserves): 14%
NP Overhead: 8%
NP Operating reserve: 3%

Mortgages

The loans on Brooks and Harvest are somewhat complicated already, and will get more so in the future. In order to develop new properties and maintain existing properties, NP uses equity on houses that have it to secure loans for other properties. It's therefore not really possible to say which house has which loan in general, but here's the general idea:

Brooks

National Cooperative Bank: $184,000, 7.23%, 30 year amortization, balloon in 2017, no refinancing penalty
USCA (Berkeley): $30,000, 8%, 30 year amortization, balloon in 2005
OSCA (Oberlin): $14,000, 8%, 30 year amortization, balloon in 2005
Kagawa Fund: $30,000, 8%, 30 year amortization, balloon in 2005

Harvest

First Federal Savings Bank of Champaign-Urbana: $163,000, 9.2%, 20 year amortization, $3260 penalty if refinanced before 2007
Kagawa Fund: $30,000, 8%, 30 year amortization, balloon in 2005
North Country Development Fund: $20,000, 9.25%, 30 year amortization, balloon in 2005

Other (the complications)

ICC Ann Arbor: $14,000 earmarked for COUCH (out of $40,000 total), 8%, 25 year amortization, balloon in 2005, secured by Bowers House in Chicago
SCSHC (Santa Cruz, CA) and Nickel City (Buffalo, NY) have loans secured by Harvest House equity

Definition of terms:

Amortization- number of years after which loan will be paid off

Balloon- date at which refinancing is required

Equity- value of a property that is not used as security for loans

Refinancing- process of getting a new loan to replace an old loan

Security- a property (or portion thereof) that is used as collatoral for a bank loan