Most buyers opt for FHA for the lowdown payment. The coop decides the minimum down payment which is usually 20%. FHA is for the purchase of real estate. In purchasing a coop you are buying shares in a corporation that gives a proprietary lease for a particular unit.
Just closed a co-op Wednesday that had a SONYMA loan, and the interest rate was 3% - an unbelievable rate for a 30 year fixed mortgage! However, the buyer put down 20%.
Sally Griffiths, GRI, Green
Real Estate Salesperson
Accredited Buyer Representative
FHA mortgages are only available for the purchase of Real Estate (such as a house or a condominium). When you buy a co-op, you get a Proprietary Lease and a "stock" certificate. Since a coop is not real estate, but actually shares in a corporation, FHA loans cannot be used for that type of purchase.