Future Folk is a cooperative society which uses a mutual home ownership model.
© Lauren Goodey 'Mouse Patrol'
The mutual home ownership society (MHOS) financial model will be used to finance the building of a co-housing development. In a MHOS, the cooperative society leases its co-housing dwellings to tenant members who will pay a monthly contribution, a portion of which forms their equity share within the cooperative society over time.
Unlike other cooperative housing, the MHOS model allows members to accumulate equity shares with the co-op which can be recuperated when you wish to move out. Your equity share can be bought upfront (much like a deposit when buying a home) or accumulated as part of monthly ‘rental’ payments (in a similar way to conventional shared ownership products) or as a combination of the two.
However, unlike conventional property ownership, the equity owned by members of a MHOS are shares in the society and its assets as a whole, rather than the individual homes themselves.
Households will make monthly payments to the MHOS, which will serve three purposes:
to pay the interest on the loans FFS has taken out to finance the purchase of land and development of properties
to build up a community pot, and
to build up residents’ equity unit shares
To read more about our vision, financial model and legal structure, please see our project development plan.
Financing The purchase of land
Future Folk will soon be raising loan stock to finance the purchase of the land
© Lauren Goodey 'The Beach'
As a cooperative society, Future Folk is able to raise loan stock, which is a loan in the form of an unsecured fixed-term, fixed-interest bond. The capital raised from this process will be used to purchase land in Sussex for a co-housing community and associated society enterprises.
There are two categories of loan stock investment.
Read more about loan stock here
Resident member loan stock
If you wish to be a resident of the co-housing community you can invest loan stock, which will be used to purchase the land. Once the co-housing community is built and you move into your dwelling, the loanstock you invested will be converted into your equity share in the co-operative. For example, if you were to invest £50,000 in loan stock this would be converted to £50,000 equity share and you would pay a monthly contribution to the co-operative until you had bought the remainder of your equity share. If you wish to invest resident member loan stock, please read the 'Join us' page becoming a resident member.
Supporter Loan stock
This is loan stock that is invested by people or organisations (such as other co-operatives) who wish to invest money at a fixed rate for a fixed period because of the benefits the investment would bring.