What is Co-op Housing?
A housing cooperative is a group, usually a corporation, which owns a piece of real estate (generally an apartment building). Each person or family who wishes to live in the building would purchase a share of the corporation. This grants the buyer a proprietary lease on a specific unit in the property.
Housing cooperatives started in response to rent control laws in major cities. Cooperatives have now spread across the country. Co-ops can alleviate high housing costs and offer benefits similar to home ownership without having to maintain a traditional home.
Cooperative (Co-op) shareholders are responsible for maintenance fees for the upkeep of the building, property taxes, etc. Hallways and other common areas on the property are owned jointly by the Co-op’s shareholders.
If you wish to buy into a Co-op, a Co-op board must approve you first. This approval process may require an interview and submission of additional information.
How is a Co-op Different from a Condo?
In a condominium complex, a resident owns a specific unit (or at least the surface of the interior walls of the unit and space contained within). It is considered real estate.
In a Co-op, a resident owns a share of the Co-op corporation, which entitles them to a proprietary lease for a specific unit. The co-op share ownership is not considered real estate, but personal property.
The Difference Between a “Co-Op Share Housing” Loan and a “Mortgage.”
In a condominium complex, a resident owns a specific unit (or at least the surface of the interior walls of the unit and space contained within). It is considered real estate.
Co-op Share Housing loans are a little different. They are not a mortgage. In the case of a Co-op, each individual unit does not have a deed. The Cooperative owns the entire property and holds the deed.
A Co-op Share housing loan is a loan that allows you, as the buyer, to purchase your share in the Co-op and the right to live in your unit.
Visit the Senior Cooperative Foundation to learn more about Senior Cooperatives.
Visit our Mortgage Center to find out how you can start the cooperative loan process.
You can also visit our loans page to learn more about all of the loan products that we offer.
