co-op financing with co-borrowers

Each coop can create its own rules about parents/co-signers/who can live in the apartment/etc

yes, but the reps at the banks (3 different ones) told me that co-op financing is only permitted unless all involved parties are to be living at the unit principally. does the restriction then come first from the co-op board or the bank?

I am not allowed to have a co-signer/borrower on the mortgage who isn't going to be a principal resident of the apartment - ok

I don't want to have a roommate/friend/girlfriend be on the deed and the mortgage with me for obvious reasons. - ok

so you don't want her on the deed or the mortgage according to the last statement, and the first statement says she cant be on the mortgage, so whats the problem?

as I mentioned, my income alone isn't good enough for the full amount of the loan, hence the co-signing with a family member.

the point of the girlfriend/roommate is to share the monthly costs with so that they aren't too high.

so, i need someone to co-sign with who won't be living there with me. what are people's experiences with that in regard to banks and co-ops?

Each will have their own requirements. Co-op obviously comes first, and if they permit it, then your lender will have his own set of rules. For the lender, the more you put down (20% likely isn't going to cut it if you don't fit all the other criteria) the more flexibility you will have. Their rules might change if you put more down, and also if you are below the $417,000 conforming limit. (Yes I know it's $729K in manhattan but lenders DO differentiate for terms and costs) Your debt to income ratio is going to be a major hurdle in any co-op and you may not figure that out until they decide last minute to reject you.

P.S. Not to be a jerk, buy why are you even considering taking on more than you can pay on your own? Unless you have a lot of cushion in the bank and/or your parents are fully prepared to help you pay your mortgage, is this really smart? Be prepared for your apt. to drop in value in the short term...

thanks for your help-- i suppose the thing to do would be to find out if the co-op board would accept a co-signer and then find a lender willing to work it. as long as it isn't against some state law, i couldn't figure out why this would be the case.

as for your question NYC10007, i'm a classical musician who wants to stay in the city for a long time (10+ years) and i have a stable income for at least 5 of that from my doctoral fellowship. given how expensive it is to live here, and the cycles of gentrification ultimately pushing artists out from transitioning neighborhoods, i want to buy something where I can rent out a room or live with a girlfriend and not have to worry about it.

I do not understand what the bank is telling you (I would not be surprised if the coop rules said so, but that is a different question). Lots of people buy real estate, and don't live in it, or do so rarely. What if your parent/relative were to buy the property, and you "rented" it from them (again, co-op rules to the contrary aside)? Is the bank saying they would not lend to a non-resident, period? Makes no sense.

On a more fundamental note (a) I concur with the caveats of 10007 above, and (b) if you are going to have a co-signer and/or intermittent roommates, you should be looking at condos because you will not get past any but the most liberal of coop boards.

i don't understand it myself either, but I spoke with 3 reps today from M&T (the holders of my uncles mortgage), HSBC and Astoria FS&L and they all knew off the top of their head that co-borrowing for income adjustment purposes isn't allowed if the co-borrower isn't going to be living there. It's because the ownership title of the co-borrower would be "investment property" and they (the banks) apparently don't/can't let that happen with co-ops (yes to condos though). I don't know if this is an NYS/NYC law though, or just a bank policy.

As for condos, I suppose that my be the only way, although they are so much more than the co-ops that I have been looking at that it's not really feasible for two bedroom units. I'm sure my ongoing NYC RE saga will have to take another unexpected turn...

"I've found the co-op I want to buy and with my girlfriend living with me (as she does now) the monthly costs are more than within my abilities ... Is there anything that I can do (apart from seller financing) or am I completely screwed insofar as the co-op route?"

Well, for starters you can find a co-op that you can actually AFFORD.