New York's Cooperative and Condominium Community

Habitat Magazine Insider Guide



The Problem: Cash Shortage

Quick money. There are ways for co-op and condo boards to get through a tight financial spot. Co-ops with an underlying mortgage should go to the financial institution that holds it to see if it’s willing to do a line of credit or something to kind of get you through. Condominiums have two different options. They can get a common interest realty association loan, or a CIRA loan, where the lender holds the increased assessments as collateral for large projects. These loans are very popular right now. Another option is taking out a mortgage on the super’s unit, which pertains only to condominiums or homeowners’ associations that own a super’s unit. You can use that unit as another way to get quick access to capital.


Interesting rates. The interest rates on a super’s unit are fixed, and they’re set over the treasury rate. So if you’re going to do a five-year deal or a 10-year deal, it’ll be about 250 basis points over that treasury rate upon closing. Today the 10-year treasury rate is 3.93%, plus 2.5% comes out to an interest rate of 6.43%. The other great thing about the super’s unit mortgage is usually the bylaws don’t require a unit-owner vote and approval by a supermajority. You can close within 30 to 45 days.


Another option. A lot of condominiums might have a healthy reserve fund, but they want to keep it that way and also be able to spread out the increase in assessments over a longer period of time for large projects like doing facade work or replacing a boiler or remodeling the common areas or complying with Local Law 97. If there’s an alternate lender or a green lender that offers some sort of tax break or other discount, that’s certainly another option.

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Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments

Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise

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