Liquidity Requirements

Your debt-to-income ratio is also a crucial component. Even if you have strong liquid assets post closing, if your debt-to-income ratio is higher than, say, 30% (with many co-ops requiring even lower numbers--it's not uncommon to see 25% as a cut-off) you will not be considered.

I just bought a cooperative on the UES. They looked at the debt to income ratio first and then the liquid assets. Our broker tipped us off to the "debt to income ratio" before we submitted offers to any of the places we saw. He said to plan that 25% was going to be the cut-off.

As a general rule of thumb when buying a co-op; 25% debt to income (some adhere strictly to this number. Others will be okay with 26%-29%). 2 years loan payment/maintenance liquid post close. Plenty of boards are okay with 1 year if income and dti are solid. Also bonus v salary can factor in. Though it certainly looks good to have well funded retirement accounts, they won't be considered for the liquidity number.. Boards will also weigh all the variables; dti, salary, employment length, savings- meaning there is not just one factor that will eliminate you.

Then you have what I call the 'Park Avenue corridor' where you are looking at 1-3X sale price and minimal financing allowed (applies to some UWS buildings as well).

It can be very frustrating and difficult to know what each board wants to see. Certain buildings are obvious. If a client has just 1 year liquid we always ask for guidance when scheduling the viewing.

Keith Burkhardt
The Burkhardt Group

I can get you a loan commitment from a lender even before you have identified the property you want to buy. . That could give you some leverage. This is far different than a pre approval. Therefore when you go to contract, the lending process is faster and seamless.

Ellen Silverman
Licensed Mortgage Broker since 1990 NMLS#60631
Licensed RealEstate Broker since 1987
esfundingco@aol.com

In my mid-20s, I purchased a small studio in Midtown. Since I was younger than most buyers, I offered to front extra maintenance and mortgage into an escrow account for a specified time period, which showed I was serious about the process. Fortunately, the Board limited the escrow to just 2 years of maintenance but it definitely helped me get approved. I highly recommend offering more than the 2 years, especially if you have enough liquidity and really like the building/unit.