Financing a Co-op

Co-ops are very common in New York City, unlike the rest of the country. They differ from condos in that they are owned by an apartment corporation.  

The main distinction between a housing co-op and other forms of homeownership is that in a housing co-op you don't directly own real estate. But if you don't own real estate, what exactly are you buying? You are buying shares or a membership in a cooperative housing corporation. The corporation owns or leases all real estate. As part of your membership (being a shareholder) in the cooperative you have an exclusive right to live in a specific unit (this is established thorough a occupancy agreement or proprietary lease) for as long as you want, as long as you don't break any of the rules or regulations of the cooperative. As part of your membership, you also have a vote in the affairs of the corporation.  A shareholder owns a percentage of the total shares within the corporation. The larger the apartment, the higher the percentage of shares the individual will own.