Coop boards- Maternity leave

I am a mom of 2 sons so I am sympathetic, but I am also on a coop board and this would not look good to us. Essentially she has no income and there is no guarantee that she will be going back. Aside from the coop board, I would wonder if a bank would give you a loan at 40%. If you do get past a coop board, they will likely ask you to put 1 - 2 years maintenance in escrow. Good luck.

As a former co-op BoD member, I would say this does not look particularly well for you.

If there was a letter from the company that stated something like "Ms. Jones is on elective non-paid maternity leave and will be returning to work full time at a salary of x (or salary + bonus, or whatever) on y date," and the date was in the next three months or so, then that is one thing. I would be OK with that.

But an open ended letter that is further out chronologically - anything can happen in a situation like that. New department heads, hiring freezes, companies are bought/sold, your wife decides not to return to work for whatever reason, etc. I would, and the BoD would, be basing our decision on your finances assuming your wife was not working at all, and your salary alone was carrying the entire situation alone.

Would this not constitute discrimination? Pregnant women on mat leave can't buy co-ops (realize that this is not quite the case here, but...); that is the effect.

There's no discrimination. The woman's not working. No work = no money. No money = no co-op.

And by the way, if the woman were working, and the man was on a non-paid sabbatical leave under the same description, the outcome would be precisely the same.

Thank you for the input.

matsonjones, there will be a letter exactly as you described noting her return to work full time (we anticipate May), so you think that will cover it?

jms8- We actually were approved by a large bank for $400.000 more than we are anticipating spending on the apartment. Should we submit that pre approval with our board package?

Thank you again!

you should submit a loan commitment which is stronger than pre-approval - there is sometimes a big difference between the two

Thank you, jms8. Also, would a letter to the board as described by matsonjones be acceptable to your board or to most reasonable boards, in your opinion?

OMG this is a lawsuit waiting to happen. Maybe you can casually drop in the application "We know this is unusual but trust it would not be a target of discrimination".

Sorry. As matson stated above, No working = no money = no co-op. There's no discrimination here.

***

"We actually were approved by a large bank for $400.000 more than we are anticipating spending on the apartment. Should we submit that pre approval with our board package?"

Co-op boards don't give two hoots what a bank has "approved"; their lax standards were made painfully obvious when they blew up the economic world in 2008.

NYCMatt I agree with you regarding the lax standards.

And we are not litigious people. There is no discrimination.

I am just curious if boards recognize maternity leave as a legitimate reason for lower income, and will our past and future income be considered.

Thanks

Jycnyc,

Please do not buy into a coop. Most of them are totally unreasonable. You stated that you will have 2 years maintenance/mortgage in liquid assets post closing and it should be sufficient.

As far as Matt's comment about "the lax standards that blew up the economic world in 2008", this generalization gives you an idea about their type. How does this generalization apply to your situation in 2012, when banks lent to qualified individuals only? Go figure....but this is their state of mind...What I have found out is that most of the coop members would not be able to pass even their own standards!

I know, because I bought into a very well known CPW building, not at some low life Washington Heights walk up. Try to avoid it. Buy from a sponsor if you want a coop, or buy a condo or a TH if you can.

I would put little weight on the letter, she needs to be working, plenty of people don't go back after mat leave, essentially she has the option to go back and employer that will take her, that's it, you need the income to get in, not the promise of income. Agreed a condo might be better for you.

you guys are so convoluted.

his wife can collect un-employment during the 1 year of unpaid period. and any reassonable board will take that into consideration and will not give this couple a hard time

now i understand why so many buyers complain about coop boards, there are really so many mean people out there

Hmmm, did not mean to capture the OPs question, but think that IF she was on mat leave (think here she is no longer) it would be pretty clear case of discrimination. Seems similar line of reasoning to: http://articles.latimes.com/2011/jun/12/business/la-fi-harney-20110612

But I know not the case here.... Just curious.

If I was OP I would make spell out the situation in full detail in the letter, including her intention to go back to work and her sincere hope that the choice to have children does not hinder their opportunity to buy a home.

If the OP does not meet the financial requirements based on truthful, current income, then no discrimination case will go anywhere. All the Board has to say is that they applied their (lawful) rules. This presumes of course that the Board minutes do not say, "we don't like pregnant people" anywhere.

This would not hold any water as a discrimination case. OP has said he understands that, so why continue to beat this particular dead horse? As others have pointed out, it all boils down to the financials. If the numbers don't work, they don't work. You're not gonna pass the board. OP may gain some ground in offering escrow maintenance but even that may be a bridge too far for some boards.

As far as the thinly veiled litigious threats suggested by some posters ("we hope our choice of having children doesn't hinder our ability to buy a home", "We trust we would not be subject to discrimination", yada, yada yada)--gimme a break. Truly laughable. No one is being discriminatorily 'denied' the 'ability' to buy a home. Any more than the Dakota board would be discriminatory in denying a family making $200K a year approval to buy a $15M 12 with park views. If you can't afford it, you CAN'T AFFORD IT. Period. End of story.

OP it sounds like you have a good head on your shoulders and I'm sure you will find the right place in the right price range. May not be this particular place but something will come your way. Good luck.

I'm with bramstar, particularly paragraph 2.

I'm with bramstar and greensdale:

Unless your wife has a contract with her employer, specifically stating that her maternity leave (however many months) and her resultant post-maternity salary = the income comfort zone of the co-op board:
don't count on it.
As bramster advises:
Something in the right place and price range will come your way.

How big or small of a building? What's the board's reputation? I agree that this is unlikely, but I wouldn't say it's an automatic no, depending on the board's other policies. Sometimes the quirks work in your favor....

E.g., my building is VERY friendly to self-employed individuals. Granted, we're small and unusual, but since the time of co-op conversion, the majority of the board has been self-employed. At one point in time, every unit in the co-op had a self-employed individual. Our policies toward self-employed individuals are extremely lenient. We treat the self-employed basically the same as anyone else, whereas other buildings may require all cash, a large percentage down, or a maintenance deposit.

If you're working with a broker, he or she may be able to give you some insight as to whether this building or another building in your target will consider your situation. Maybe there's a board with three parents who took time off to raise children after buying. Granted, I live in a brownstone building, which I'm guessing is not your target, but based on your situation, I'd actually approve you. It's no different than if any other shareholders we've already approved based on joint income decided to quit their job and be a stay-at-home parent. It may actually be better, even. But I'm an anomaly and most buildings/boards won't think that way....

If you're working with a broker, he or she may be able to feel out this building's or another target building's board.

Thanks lad, and everyone else, for your comments. I'll keep you posted in case anyone else runs into this situation.

My wife went on maternity leave for 1 year... that was like 5 years ago and she is still at home. If a coop board could make her go back to work, that would be the only use I could ever have for living in a coop.

Pawn Harvester is not alone. I know many families where the spouse did not return to work. I would rent until your wife returns to work. If she does not, you cannot afford this place.

Oh, and how does that 40% DTI look when you start paying $15k-$40k for preschool and elementary?? REMom is right - you should just rent or buy in the burbs.

http://www.nytimes.com/2013/02/23/your-money/us-trails-much-of-the-world-in-providing-paid-family-leave.html?hp

That article doesn't change the fact that this is not the time for a couple to be attempting a home purchase.

Indeed, articles don't change facts.