Financing frat houses a risky business
 

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Of interests:

This is a real concern. Building a house is not only an expensive, but a very long term proposition. We're talking large mortgage payments over many years.

While a chapter may be strong and vibrant right now, I've seen them fall apart over only a few years. In this era, one bad hazing complaint or underage drinking situation can cause a charter to be withdrawn -- leaving the housing corp or whomever with huge payments and little or no income.

Maintenance costs grow as the house ages and things wear out.

Now, major universities are updating their dormatories to include internet access, cable TV, air conditioning and more privacy, and Greek housing units are often not in a good position to match those amenities.

Additionally, fraternies have been known to trash houses. Somehow men just often don't take care of their homes like women do. Go figure. Argue with that if you will, but I think if you visit all of the fraternity and sorority houses on your campus, you will find the latter to be in much better shape.

Finally, I know a number of alumni volunteers who think that owning a house is one of the worst things that can happen to a fraternity chapter. Some of the reasons are above, but an additional one, which came as a huge surprize to me, is that chapters believe that having a big house is a help in recruitment -- but some advisors believe that it makes the chapter complacent ("the house will sell itself and us") and actually hurts recruitment.

It's tough.

All of the new houses at Indiana ('50s and '60s and after) were financed by the "Indiana Plan" in which the Univ. guaranteed the loans. There was never a problem for many years. Every chapter at Indiana got a new or improved (used) house under this program - even a few newly colonized.

The school eventually was forced to pay on some of these loans, and I think they have learned their lesson. The first to go was Phi Sigma Kappa, I think.