Frequently asked questions
What is a housing cooperative?
A housing cooperative is formed when people join on a democratic basis to own or control the housing and/or related community facilities in which they live. Usually they form a not-for-profit cooperative corporation. Each month they pay a fee to cover their share of the operating expenses. Personal income tax deductions, lower turnover rates, lower real estate tax assessments (in some local areas), controlled maintenance costs, and resident participation and control are some of the benefits of choosing cooperative home ownership.
What do I actually own when I purchase a unit in a coop?
What does the share or membership purchase price involve?
When you buy a share or membership in a housing cooperative, you are paying for just that: a share of the cooperative housing corporation. The purchase price will vary depending on the neighborhood, the unit’s size if the cooperative limits resale prices, and if the cooperative has an underlying mortgage for the entire property.
What do monthly charges cover?
Almost all cooperatives charge residents a monthly carrying charge (often called a monthly maintenance fee). The amount of the monthly charge varies and typically covers your proportionate share of operating and maintaining the cooperative, which can include blanket mortgage payments, property taxes, management fees, maintenance costs, insurance premiums, utilities, and contributions to reserve funds.
Where can I obtain share loan financing?
Currently First National bank is offering share loans on a limited basis. Please contact Mark Pruzan at 610-238-5018 email: firstname.lastname@example.org
What is a share loan?
Let’s say you are buying a $100,000 home. Most likely you would not be able to pay the seller the entire purchase price in cash. Instead, you would pay a down payment, and you would get a mortgage to cover the remainder of the price. In a cooperative, since you are actually buying a share(s) in a corporation rather than real estate, you get a type of loan called a share loan, which is like a mortgage. It provides you with borrowed funds to buy the share(s) from the seller. You then make monthly payments on the share loan to the lenders and a monthly carrying charge (maintenance) payments to the cooperative.