Phil Di Ruggiero
GreenLine Real Estate
Whether you're buying in a condo or a co-op high delinquency rates amongst the co-owners is a problem. I would be surprised to find a lender willing to issue a mortgage in an association with high delinquencies.
In associations with co-owners not paying their fees, you might expect to see an increase in deferred maintenance or a reduction in association services if the delinquencies become high enough.
It's true that Washington, DC co-op's include property taxes in their monthly fees. If there is a corporate mortgage, those payments are included in the monthly fees. While some agents have mentioned that this could increase the risk in owning a co-op, co-op boards tend to be able to foreclose very easily on delinquent owners.
To learn more about co-operatives, you may want to visit the DC Cooperative Coalition's website (link below).
Many lenders do not lend in Coops anymore. Most Coops will have a short list of the few lenders that will. I find it diminishes all the time.
Another problem, most of my buyers face, is the prospect of very stringent rental restrictions. They really gear Coops towards owner occupied homes so, in some cases, you have to live in the unit for 3,4,5 years, you can then rent for a year or two and then it must be owner occupied again. I have found that this can be a turn off for some buyers that may not be able to have the rental flexibility in the future.