Financing a 20% downpayment

Depends on your coop rules but usually no. They want you to have skin in the game and enough cash that you can afford to tie it up in a large downpayment. Even if what you're saying makes sense, boards don't view it that way.

A down payment is not supposed to be "financed"; that runs counter to the whole point of a "down PAYMENT".

The only viable way is to borrow the 10% now unsecured and use it to place your 20% down. You wont get a rate though that approaches that which you can have on a secured mortgage.

If you want to borrow as much as somebody'll lend, just buy a condo instead of a co-op.

It sounds as if you want to have your cake and eat it too: pay less because it's a co-op, and also get the advantages of a condo.

"The only viable way is to borrow the 10% now unsecured and use it to place your 20% down. You wont get a rate though that approaches that which you can have on a secured mortgage."

Co-op boards aren't stupid. This little scheme will come out in the financials, and will almost certainly result in a rejection.

I wouldn't do it. Co-op applications normally require you to affirm that no part of the down payment has been financed. In addition, there are sections that clearly ask for any and all loans and other obligations. I agree with NWT - if maximum financing is your goal a condo is the better way to go.

Posters are right. No co-op board will allow you to finance your down payment. Any scheme to do so will be noticed in your financial package. Keep in mind that the board will also want to see a debt-to-income of around 25% or below.

Why can't this guy say he is going to put 20% down, submit all normal looking financials attesting to that as he can afford it, and then after approval of his plan go borrow 10% of the purchase price with a 2% margin rate at Interactive Brokers?

How are you going to sniff that out, Sherlock Matt?

He use the co-op shares as collateral without approval of the co-op and the first lender.

Borrowing at 2% unsecured is easy, but not for a term longer than a year.

Oops, *can't* use....

Crescent: NWT is correct. Nix won't actually own any property after the purchase of the co-op--just shares in a corporation that owns the building and a lease to his apartment. If he wants to use the shares in the co-op as collateral for a loan for the additional 10%, the bank will have to inform the co-op and the jig is up. No need for a sleuth to figure that one out.

ridiculous question. You seriously can't pay 20% down on a co-op?

What I meant was to borrow without using the co-op shares as collateral- use a margin account at a brokerage, where of course you would need other collateral like other stocks.

Find a bank that will give you an unrecognized loan.

Any borrowing, including margin balances will show up in the liabilities section of the financials you submit as part of your board package. Given the usual margin rules (i.e., the value of securities you have to have free & clear in order to borrow cash) , the liability may not be considered significant, given the security assets. This is a form of what the OP is proposing. OP claims he can take the additional 10-15% hit to his income to cover the loan, at which point I would ask why he just doesn't invest an additional 10-15% of his income.