CO-OPS 101!

WHAT is a CO-OP?  A co-op refers to a co-operative form of ownership whereby a building is owned by a corporation (the co-op).  The potential buyer of a co-op apartment is buying into the corporation and therefore becoming a shareholder in that corporation.  The co-op in turn leases the individual apartment back to the individual.  As a result, the ownership and financing of a co-op is more complicated than it is for any other type of housing.  The typical co-op transaction involves a buyer, seller, co-op board and the management company.

WHAT is a SHARE loan? When a homeowner buys either a condo or single family home, a loan is often provided to help the person buy the property.  That loan is known as a mortgage.  When buying a co-op, the loan structure seems the same and is often referred to as a mortgage but, in fact, the loan is typically a share loan.  Because the buyer is buying shares of the corporation, they are borrowing the money to buy these shares. The loan is secured by the shares is therefore known as a share loan.

HOW long does the process take to obtain Co-op Financing? The process is determined by 1) Our processing of the mortgage application; 2) The speed in which the buyer can meet with the co-op board and 3) The completion and recording of the recognition agreement.  The normal process for obtaining a letter of commitment is similar to that of a condo or single family home.  However, only after the letter of commitment is issued, can the board interview  take place. Closings may sometimes be delayed, depending upon how often the co-op board meets.  We work with every borrower to determine when the board application is due for their individual transaction.

CAN YOU HELP US TO FIND AN APARTMENT TO BUY?  Of course!  We offer pre-qualifications for co-ops and can also direct you to Real Estate Attorneys and Real Estate Agents who specialize in co-op apartments in the different neighborhoods and Burroughs.   Simply fill out the form below or call us at (212) 838-9115 and a representative will be providing you with the information that you need to purchase a co-op apartment!