Andy, Home Owner in Brooklyn, NY

If a unit in a coop is occupied by an adult child of the owner does a bank consider that unit owner occupied in deciding to make loans on another unit

Asked by Andy, Brooklyn, NY Mon Oct 1, 2012

And, if more than half the units are not owner occupied what is the danger to the coop?

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Dear Andy:

It could still be considered owner occupied, more importantly is if a bank would consider it your primary residence. If the bank considers the property to be your primary residence, then any mortgage you take on another property may be considered an investment property and that is a completely different type of loan as opposed to a loan for a primary residence. You need to clarify the question as in... why do you ask?

With regard to more than half the units not owner occupied, that in and of itself is not as much of an issue as compared to if all those apartments are owned by the same person/entity or multiple persons/entities. The problem is that if one person owns too many units, it is risky because if that individual all of a sudden stops paying their monthly maintenance, that could be extremely costly to the co-op and can raise the risk of bankruptcy. Banks do not like that when considering to loan. Hence, you have to find out who owns the half that are not owner occupied.

If I can be of further assistance, please let me know. Good luck!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
0 votes Thank Flag Link Tue Oct 2, 2012
andy - Yes - for THAT unit. However, if the whole complex is under 65% sold - or owner occupied
most banks will not finance it. Then you will need to pay cash. of course each bank is different, some will do 51% sold but most want more percentage sold. good luck .
0 votes Thank Flag Link Tue Oct 2, 2012
Your lender and or attorney can best answer the question, therefore consider a consultation.
0 votes Thank Flag Link Tue Oct 2, 2012
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