If you’re on the hunt for an apartment in New York City, you’ve probably realized the process isn’t entirely straightforward. That’s especially true for co-op buildings. In addition to going through an interview with the co-op board where even your dog might be evaluated, there are strict financial requirements. A steady income and high credit score are often not enough to secure your chances of owning an abode in a co-op: another concern is your post-closing liquidity.

“More exclusive buildings are going to expect a lot more of their new co-owners,” says David Crook, author of The Wall Street Journal Complete Real-Estate Investing Guidebook. Boards of high-end co-ops want a buyer with the wherewithal to bear all the financial obligations that come with ownership: monthly maintenance fees, assessments, extended vacancies, you name it.

That’s why, on top of looking at financial details such as debt-to-income ratio, your post-closing liquidity will come under scrutiny. What does the term mean, exactly? Here’s everything you need to know.

What is post-closing liquidity?

Let’s cover the basics. “Post-closing liquidity refers to the amount of liquid capital a buyer is expected to have after they close on a co-op,” says Gill Chowdhury, licensed associate real estate broker with Coldwell Banker Warburg. In a nutshell? The board wants to see how much you have left in assets after making the down payment and paying closing costs. So, even if you have enough to pay the mortgage, down payment, and maintenance fees, you’ll still need to have more funds set aside.

Buildings want to be sure you’re not just getting by, but have a safety net in place to pay all costs associated with living in the building for years. “It means, can you get your hands on as much cash as necessary as quickly as possible?” adds Crook.

Manhattan homes under $1M on StreetEasy Article continues below

East Harlem

309 East 108th Street

$949,000

3 |

2

Upper West Side

175 West 73rd Street

$599,999

Studio |

1

Lenox Hill

516 East 78th Street

$489,000

1 |

1

Hell’s Kitchen

350 West 50th Street

$695,000

Studio |

1

Gramercy Park

301 East 22nd Street

$399,000

Studio |

1

Lower East Side

475 FDR Drive

$849,000

2 |

1

Financial District

15 William Street

$939,000

1 |

1

Greenwich Village

60 East 9th Street

$549,000

Studio |

1

Hell’s Kitchen

695 Ninth Avenue

$299,000

1 |

1

Hudson Heights

69 Bennett Avenue

$625,000

2 |

1

Turtle Bay

246 East 51st Street

$485,000

2 |

1

Carnegie Hill

12 East 97th Street

$695,000

1 |

1

How is post-closing liquidity calculated?

To calculate post-closing liquidity, add up your liquid assets (such as cash, checking and savings accounts, and other qualifying assets), then subtract your down payment and estimated closing costs. The remaining amount is your post-closing liquidity. Many co-op buildings require buyers to have enough liquid assets left to cover a certain number of months — or years — of housing expenses after closing.

“So, for example, if you’re purchasing a property that will have a monthly mortgage of $3,000 and has a monthly maintenance bill of $1,000, and you otherwise have no debt, your total monthly expense will be $4,000,” says Chowdhury. You would need to have that amount for however long the building stipulates. For example, if it’s one year, you’d need $48,000 in liquid assets after you close.

What do co-ops typically require for post-closing liquidity?

There’s no absolute standard, as each building can impose its own requirements. However, both Chowdhury and Crook note that having two years’ worth of maintenance fees, mortgage, and other debt service obligation payments after you close is relatively standard when it comes to post-closing liquidity.

“If the monthly maintenance is $15,000 (not at all unusual along the Fifth Avenue Gold Coast), the board is looking for $360,000 or more. Even in a more modest building with a $1,500 monthly maintenance, the board will want you to have at least $18,000 (maybe more) left after buying. And that’s not counting mortgage payments.”

Brooklyn homes under $1M on StreetEasy Article continues below

Gravesend

2286 Cropsey Avenue

$864,000

2 |

2

Gravesend

2286 Cropsey Avenue

$922,000

2 |

2

Fort Hamilton

20 93rd Street

$379,000

1 |

1

East Flatbush

40 East 43rd Street

$225,000

1 |

1

Bedford-Stuyvesant

573 Gates Avenue

$635,000

1 |

1

Brownsville

342 Legion Street

$980,000

4 |

3

Sheepshead Bay

4050 Nostrand Avenue

$429,000

Studio |

1

East Flatbush

605 East 49th Street

$999,000

4 |

3

Midwood

1017 East 15th Street

$993,000

6 |

3

East New York

313 Montauk Avenue

$999,999

9 |

4

Fort Hamilton

423 95th Street

$730,000

1 |

1

Crown Heights

749 Park Place

$650,000

2 |

1

What are the most common liquid assets?

If you’re starting to panic that you don’t have tens of thousands of dollars in cash sitting in your bank account, don’t fret. You don’t necessarily need a massive savings account balance to have post-closing liquidity (though it works if you do).

“Liquid assets can include stocks and bonds traded on a major exchange, U.S. Treasury securities, mutual funds, and money-market funds,” says Crook. “In short, anything that’s easy and quick to convert to cash.”

But in some instances, there’s a hitch. Real estate, gold bars, Bitcoin, retirement accounts, trusts, and private or limited stocks are not always considered “liquid” assets. The reason? “These things may be difficult to redeem for hard cash immediately,” Chowdhury adds.

Queens homes under $1M on StreetEasy Article continues below

Rosedale

241-02 142nd Avenue

$799,950

3 |

2

Elmhurst

84-25 Elmhurst Avenue

$685,000

3 |

1

Astoria

30-70 29th Street

$750,000

1 |

2

Queens Village

89-78 219th Street

$849,999

2 |

1.5

Queens Village

89-10 221 Place

$799,000

3 |

1

Lindenwood

84-10 153rd Avenue

$349,000

2 |

2

Murray Hill (Queens)

148-09 Northern Boulevard

$975,000

3 |

2

Flushing

142-05 Roosevelt Avenue

$368,000

1 |

1

Forest Hills

1 Station Square

$389,000

1 |

1

Lindenwood

86-10 151st Avenue

$169,888

Studio |

1

Lindenwood

84-39 153rd Avenue

$340,000

1 |

1

Hollis

195-10 Sagamore Avenue

$700,000

3 |

1

Post-closing liquidity requirements can significantly affect how much co-op you can comfortably afford, so it’s important to understand a building’s expectations before making an offer. By working with an experienced agent and reviewing which of your assets will qualify, you can focus your search on homes that fit both your budget and broader financial standing.