Coop Boards - Liquidity Rules

>Also, related...why aren't retirement funds such as 401k used for the liquidity rule? Since you can cash out with a penalty, these are accessible funds.

Sounds desperate. Why would a co-op want to enable that?

regarding liquidity requirements as a former co-op owner why wouldn't you use that experience as a benchmark?

Usually coop liquidity means comfortably liquid without extra-ordinary measures such as 401K.

it depends on the building, location, your earnings.....

if you are at 20% or less of gross in living expenses, the board will most likely give you a break and may look at your 401K. if you are at 35% of gross, you most likey can forget it.

i see this 401K thing a lot. what i've done in the past was to take out a loan against my 401K to have the liquidity necessary. once you pass the board, you repay and continue living life.

Oh that's interesting idea, ab, and worth considering. We have 500k liquid and 500k retirement and we want our monthly payments under 20% debt to gross. Would want to put around 400k down and leave 100k in cash but got feedback from one seller that it's not enough cash after closing.

Not sure what your income is like but if you're buying a place for $900k, one option is to put down just enough to get into conforming (i.e. non-jumbo) loan territory. You could put down $275k and still have $225k in post-closing liquid assets. That would be 30% down, which should be sufficient for most buildings.

You can always make a $125k payment against your mortgage immediately after closing and end up in the same spot as if you put $400k down.

Sometimes jumbo loans are actually cheaper . . . was true on my recent refi

As a member of my coop Board, we do not consider 401K or other retirement funds liquid unless the applicants are old enough to access those funds without penalty.
It would be a desperate and bad decision for anyone to pay those penalties. We want shareholders that show financial maturity. A mix of reserves and investments for the future.