Cooperatives are a form of real estate ownership in which a building is owned by a corporation. The individual units, whether they are residential apartments or commercial space, are occupied by people who purchase shares in the corporation. Co-ops are popular in some large metropolitan areas, such as New York City, primarily as an alternative to condominiums.

Owners of co-ops don’t own real estate

Co-op ownership is represented by shares of stock in a corporation that owns the real estate. You shares entitle you to occupancy of a particular unit within the building. When you own a cooperative, your shares of stock are personal property. The deed to the building is in the name of the corporation.

Financing a co-op purchase

Unlike a condominium or a house, co-op loans use the shares of stock and not the real estate to secure the debt. There is no mortgage associated with co-op financing.

Finding the right lender

Only a select group of lenders do cooperative financing. MortgageDepot offers residential and commercial co-op loans. Among the options they offer are the following:

No-income verification loans for cooperatives, at 60% financing

Financing for non-warrantable coops, Cooperatives with problems

Loans to foreign nationals for coop financing

Underlying mortgages on Cooperative buildings

Investment financing for Cooperatives

Non-owner occupancy for co-signers on Cooperative loans

Coop jumbo loans from $636,000 to super jumbos up to $50 million

Financing for up to 95 percent of the value

Pied-a-terre or second home financing

Financing is also available for so-called “kiddy co-ops.” These have become popular with parents who buy a coop for their son or daughter to live in rather than paying for housing at the college. When the child graduates, the parents have it as an investment to hold or sell.

At MortgageDepot, loan applications are handled by people who know all about Cooperatives!

Click here for our Approved Coop Buildings list.

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