Small co-op buildings face uphill battle for financing

It’s hard for many people to get financing to purchase a home these days, but harder still for residents of small co-op buildings, the New York Times reported. Small co-ops are now trying to convert to condominium, as buyers in these buildings are finding their options increasingly limited.

Buyers in small co-ops often have to put down as much as 40 percent in a down payment, and work with lenders, such as JPMorgan Chase or Bank of America, which will consider loans for co-ops under 10 units, unlike many other banks, the Times said.

“There are a lot of banks out there that will not make the loan in a building with fewer than 10 apartments,” Aaron Shmulewitz, of law firm Belkin Burden Wenig & Goldman, told the Times. “The market for co-op apartments in very small buildings is pretty much reduced to individuals paying cash or individuals who have strong relationships with their personal bankers.” [NYT] –Guelda Voien