Faylinn Hale Membership Prospectus

CO-HOME
MEMBERSHIP
PROSPECTUS
AND
INFORMATION BULLETIN
I. Introduction.
An offer to purchase a membership in Faylinn Hale is more than
an application for a place to live. Membership in a housing Co-
Home grants full partnership in its ownership and operation.
Faylinn Hale offers the advantage of ownership and the convenience of community living at prices well below
those of equivalent condominium or single-family homes. Evaluate the advantages of co-home membership:

Costs are lower because member residents are their own landlords. No landlord profits are removed
from the community
The Co-Home's Managing Director has the authority to accept or deny applications for membership,
and thereby influence the quality of the community members.
Members of the Co-Home own and through the Board of Directors control the property and
determine monthly payments, house rules, and community policies.

II. Description of the Property.

The Co-Home is a not-for-profit Co-Home housing corporation chartered under the laws of the State
of Hawaii on October 15th, 2017. The Co-Home owns a 4 unit co-housing community located at 12-
4280 Puna Street, Pahoa, Hawaii 96778 for use by its members.

The Co-Home was organized as a Limited Liability Company as amended and is governed by the
related Articles of Incorporation, and the Owner Financing Agreement with the incorporator,
Jennifer Shurley. Accordingly, it is obligated to follow regulatory requirements prescribed by the
Secretary of State, and all company related laws and authorities.

The land and buildings are owned in fee simple title by the Co-Home, subject to mortgages as
described below. The members of the Co-Home own and control all the Co-Home's shares of stock.

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 Faylinn Hale Membership Prospectus
There are 4 private accommodations, one common kitchen, shared bathroom, and lounge area
making one co-housing dwelling on the property.

The tiny dwelling units in the co-home accommodate one individual, or couples. Minimum age for
membership is 3o years of age with 8 maximum members onsite.

There are 4 one-bedroom flats, two with shared bath, and two with private bath.

Each dwelling unit has an assigned pro-rata value expressed as a factor of the total value assigned to
the Co-Home. The following unit value factors have been assigned to each dwelling unit:

(1) Menehune Chalet ... 23%

(2) Suvannamaccha Chalet (Private Bath) .. 30%
(3) Shea Chalet (Private Bath) . 27%
(4) Pixie Chalet ... 20%
Interior furnishings and decorations are furnished and maintained by the member and along with
their other property constitutes the personal property of the member. Members also have the
option to purchase their own appliances or electrical systems to upgrade the value of their private
dwelling unit.

Unless otherwise agreed, the Co-Home owns and maintains the plumbing and electrical system,
furnace, air conditioner and water theater as well as the structural integrity of the building, its roof,
exterior walls, windows, and foundation at no additional cost to the member. The Co-Home also
maintains the common grounds, sidewalks, fences, and parking facilities at no additional cost to the
member.

III. Co-Home Ownership.

A members ownership interest is evidenced by a membership certificate issued by the Co-Home and an
occupancy agreement that grants the right of occupancy of a private dwelling unit. The occupancy agreement
grants the member a right to occupy the dwelling unit for as long as the member complies with the
conditions of occupancy. Construction is taking place between November, 2017 through June, 2019. Each
unit will be available for occupancy pending development schedules as follows:

(1) Menehune Chalet will be available pending construction completion in October, 2018
(2) Suvannamaccha Chalet will be available pending construction completion in December, 2018
(3) Shea Chalet will be available pending construction completion in December, 2018
(4) Pixie Chalet will be available pending construction completion in July, 2018
To become a member of a co-home, a person buys a share or membership certificate in the Faylinn Hale,
Limited Liability Company, and an exclusive right to occupy one of the co-housing dwelling units. Members
occupy their private dwelling unit pursuant to a proprietary lease called an occupancy agreement. Each
member of the co-home owns a share interest that represents an ownership interest in the real estate and a
leasehold interest to a specified dwelling unit.

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 Faylinn Hale Membership Prospectus
Ownership of the co-home interest also gives the member the right to democratic participation in the control
and management of the cohousing facility and the obligation to pay their or their share of the cost of
operating and maintaining the co-house. The Co-Home operates with one class of membership and,
therefore, allows one vote per membership certificate regardless of the number of persons owning the
membership or the costs of the unit.

Persons who wish to move from the co-home may sell their membership and right of occupancy to a
purchaser approved by the other members. A more detailed and authoritative statement of their procedure
is contained in the bylaws. The Co-Home charges transfer and closing fees to record the transfer on its official
books.

The corporation is not offering fee simple ownership in the property or the dwelling units. Membership in the
co-house provides for the creation of a leasehold interest in a dwelling unit to which the membership
certificate is applicable.

IV. Mortgage Obligations.

The Co-Home is obligated under one owner finance mortgage loan that is established with the company
establishment. Each mortgage covers a separate section of the property and is offered by a private individual
owning 100% of the interest to said mortgage. They are secured by the land and buildings of the co-home
and are non-qualifying and non-recourse to the individual member. The monthly payments are made by the
co-home members in share sponsorship purchased from the Owner Financier from payments she receives
from the members each month.

Each mortgage note bears a fixed interest rate of 0% and is payable over a 60, 90, or 120 month term in equal
monthly installments. Each mortgage includes a deposit of 15% the total mortgage value and monthly
payments on the principal as follows (All Costs are in US Dollar amounts):

Total Down Payment Amount 120 90 60

Unit Cost 15% Financed months months months

Unit 1, Menehune Chalet 36,433 5,465 30,968 258 344 516

Unit 2, Suvannamaccha
Chalet 46,000 6,900 39,100 326 435 652

Unit 3, Shea Chalet 41,898 6,285 35,613 297 396 594

Unit 4, Pixie Chalet 30,968 4,645 26,323 220 293 440

The unpaid principal balance for each unit type on incorporation was:

(1) Menehune Chalet .. $36,433

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 Faylinn Hale Membership Prospectus
(2) Suvannamaccha Chalet .. $0 (Owned by Jennifer Shurley)
(3) Shea Chalet . $41,898
(4) Pixie Chalet . $30,968

V. Obligation to Owner Financier

The Co-home received land and development cost subsidies from the Owner Financier, Jennifer Shurley on
incorporation, and through development activities. The subsidy is paid directly to the Faylinn Hale company,
and enables the members to receive low cost, high value tiny homes in a co-home environment without
interest or banking participation.

The co-home is operated under an Owner Financing Agreement with Jennifer Shurley.

Consent of Jennifer Shurley is required to increase the mortgage obligations of the co-home, increase
monthly fees charged to members, and to make alterations to the structure of the company, or the
infrastructure of the co-home.

VI. Reserves.
A Reserve for Replacements is established to assure the availability of funds for the replacement of roofs,
water theaters, as well as maintaining common kitchen and bathroom structures and gardens. The members
are required to fund their reserve each month. Disbursements can be made only with the consent of the then
current voting members.

The members are required to deposit an amount equal to 0.5% of their gross budgeted unit value into the
reserve each month whenever the balance in the fund falls below 10% of total co-home value or $10,000,
whichever is the lesser.

VII. Co-Home Documents.

The Co-Home Documents consist of the Articles of Incorporation, Bylaws, and the Occupancy Agreement.

The Articles of Incorporation were issued by and are recorded by the office of the Secretary of State of the
State of Hawaii. The Corporation is organized as a limited liability company.

The Bylaws are the governing document of the corporation and set out how the organization is structured
and how it should function. It delineates the powers of its governing bodies and the rights of and restrictions
on individual Members.

The corporation is governed by a Managing Director until membership is established, and each member
becomes a officer in the Board of Directors. The Managing Director and or Board is comprised of the member
stockholders and is charged with the proper administration and management of the affairs of the
Corporation. It monitors the companys finances, selects members, sets community policies and establishes
membership rules and regulations. The Managing Director fixes the operating budget and the monthly fees
required of each member.

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 Faylinn Hale Membership Prospectus
An annual meeting of members is held each year to elect Officers and conduct any other business that might
properly come before the members.

VIII. Membership.
To become a member of the corporation a person must be approved for the purchase of a membership by
the Managing Director.

The bylaws restrict the transfer value of membership by setting out the maximum resale price at which
members may sell their membership interests at a 1% increase per year after fully paid in.

Members who wish to leave the co-home must first offer their co-home interest to the other members who
has first right to purchase it at the transfer value as defined in the bylaws. If the corporation chooses not to
purchase the co-home interest, the departing member may sell it to any person approved by the Board at a
price not exceeding the transfer value defined in the bylaws.

A member may transfer their membership to a member of their or their immediate family or, upon death, by
will or intestate succession, provided the new member is qualified according to current eligibility criteria and
is approved for membership by the Managing Director.

The Occupancy Agreement is a proprietary lease agreement between the corporation and the member. It
establishes the member's right to occupy a specific dwelling unit at a monthly charging charge equal to
private and common expense liability allocated to that unit interest.

Monthly fees include the members payment for the blanket mortgages described above, satellite cable and
land line telephone, water catchment and composting waste management, management and administration
of the Co-Home, real estate and business taxes, common area maintenance, capital improvements and
reserves. The Occupancy Agreement has an automatic renewal clause to create a more lasting leasehold
interest that can be sold along with the membership.

The units as defined are unpermitted structures made of organic materials. Hazard and liability insurance will
not be available for any of the units, and will be replaced with the reserve.

The corporation provides for the following utilities through passive systems including; common room solar
electricity, domestic water through catchment systems; Composting toilets; garden maintenance. The
remaining utilities are individually installed such as solar or wind electrical systems in the unit, and paid for by
members directly to the supplier.

The co-home is not intended for use as investment property. Members may not sublet their dwelling unit
without the prior consent of the corporation. Do not purchase these units as a rental unit, it will not be
permitted.

The Managing Director may terminate membership and the Occupancy Agreement for material
noncompliance or other good cause. Defaulting members are given notice and a right to respond in a
meeting as determined in the house rules of the co-home.

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 Faylinn Hale Membership Prospectus
The Occupancy Agreement includes by reference the house rules of the Co-Home. The house rules are
created by the Managing Director and are intended to set guidelines for occupancy and use of the property
and for the efficient administration and management of the co-home.

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