What Will The Co-op Board Ask For?
A: A lot. If you are a first time buyer of a Co-op, then read this post so that you know exactly what YOU are getting into, and what the potential buyer when YOU SELL will have to provide to get a board approval.
A Co-op board will most likely look deepest into your financial history, current salary, and references when evaluating your board package. So for sake of ease I will break down by category what you will be required to provide for most Co-op boards.
Financial History
Last 2 Years Tax Returns w/ W2's
Financial Net Worth Form (All Assets & Liabilities)
Bank Account Hard Copies (Last Month)
Hard Copies backing up Assets
Current Salary
Last 2 Pay Checks or Deposit Transfers
References
Up to 5 Personal References
Up to 3 Business References
Letter from Employer stating position, salary, & length at firm
Letter from Bank confirming accounts and balances
Letter from present Landlord
In addition to all of this you will need to gather these loan documents from your lending institution (usually takes the longest to receive):
Copies of Aztec Recognition Agreement (3)
Copy of Loan Commitment Letter
Things The Board Looks For:
1. No more than 1/3 monthly salary to be used for housing costs
2. At least 1 Years worth of Mortgage + maintenance in liquid assets AFTER closing costs
3. Increase in salary from previous year
Other items the board may ask for can be copies of personal ID's, certificate of foreign status, hard copies of individual item's net worth, or the contract of sale if you are selling a property.
NOTE: The seller broker has a responsibility to their client to pre-qualify you (the buyer) for purchase of the property. The seller broker should be well aware of what the board will look for in terms of financial and situational (such as no parents buying for kids) and should NOT allow their client to accept the offer of an UNQUALIFIED buyer.
If you plan to buy a Co-op be prepared to present original copies of everything noted above, and possibly even more, for the board to review. Also keep in mind that you will be in a position later on when you sell where you will have to pre-qualify the potential buyer; no one wants a board turndown!
Originally Published 01/07/2006
Posted by Phylis Goldberg
Tue Aug 15th, 2006 07:08 PM
My Co-op Board in a NYC aparatment house is nervous and reluctant
about permitting a Reverse Mortgage to Co-Op shareholders.
Boards in other apartment buildings in NYC are now permitting it.
What can I do to convince our Board this is critically important for senior citizens
who are apartment rich and cash poor?