Coop Board Requirements - What Do Coop Boards Ask For?

By
Real Estate Agent with Compass

 What Do Co-op Boards Ask For - Require?

coop board

A: Detailed personal and financial information. If you're a first time buyer of a coop below is the typical information and documents required to be submitted with a coop board package. All coop purchasers (except sponsor sales) are required to submit a board package. The board will review the package, if it looks in order they will schedule an interview with purchaser.

A Co-op board will require complete financial disclosure. They will look into your financial history, current and past income, assets, liabilities and references when evaluating your board package.

The following documents are required for most Co-op boards.

Completed Purchase Application

Contract of Sale

Credit Check Authorization

Financial Condition and History
Last 2 Years Federal Tax Returns w/ W2's  (some buildings require 3 years)
Statement of Financial Condition  Net Worth (All Assets & Liabilities) Signed
Copies of Bank Statements (Last three Months)
Proof of Assets  (Bank, brokerage statements verifying information in purchase application, real estate deed, title or stock certficate.

Current Salary

(3) Three pay stubs

References

Up to 5 Personal References
Up to 3 Business References
Employer verification letter stating position, salary, & length of employment.
Letter from Bank confirming accounts and balances
Landlord Reference letter

In addition to all of this you will need to gather these loan documents from your lending institution (usually takes the longest to receive): Many coops will not accept risky loan products or interest only loans and require a 20%-30% downpayment.

Mortgage

(many coops will not accept risky loan products or interest only loans and require 20%-30% downpayment)

Copy of Loan Application ( information on loan application needs to match information on purchase application)                       

Copies of Aztec Recognition Agreement (3)
Copy of Loan Commitment Letter

Typical Board Requirements: (what the board is looking for)
1. 25% Income to debt ratio. Housing costs should not be more than 25% of income.
2. At least 1 years worth of mortgage + maintenance in liquid assets or two years of maintenance after closing costs
3. Increase in salary from previous year, potential future earnings

Other items the board may ask for can be copies of personal ID's, certificate of foreign status, listing agreement or the contract of sale if you are selling another property. They may ask for a cover letter or essay. They may want to meet pets and family members.

The listing broker has a responsibility to their client to pre-qualify (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 children or no pied-a-terre) and should NOT allow their client to accept the offer of a buyer not financially qualified to pass the board.

If you plan to buy a Co-op be prepared to fully disclose a complete personal and finacial picture. Original and seven collated copies of everything noted above are required 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.

It is very important to work with an experienced Manhattan coop broker when selling or purchasing a coop.

courtesy of:

Mitchell Hall, Associate Broker, The Corcoran Group

 

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Ambassador
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Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Mitch, and down here, the boards really do look at all this stuff.  And if you have a dog, they want shot records.

Oct 10, 2011 02:08 AM #1
Rainmaker
217,470
Yvette Chisholm
Long & Foster Real Estate, Inc. - Rockville, MD
Associate Broker - Rockville, MD 301-758-9500

During the hot market, the COOPS expected a lot more than any of the lenders.  I wonder if they are enjoying a lower foreclosure rate?

BTW, I know what a recognition agreement is - but what is an AZTEC recognition agreement?

Oct 10, 2011 02:11 AM #2
Ambassador
1,907,412
Hannah Williams
Re/Max Eastern inc. - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-953-8818

WOW they seem to want more information than the mortagage companies do

Oct 10, 2011 02:57 AM #3
Rainmaker
597,421
Mitchell J Hall
Compass - Manhattan, NY
Lic Associate RE Broker - Manhattan & Brooklyn

Pat, coops are tough. Condos are easy. Some condos are so easy they ask more about the dog then the buyer. I had a condo sale recently on the application they ask about the dogs shots but they don't care if the purchaser is employed. lol.

Yvete, Yes, we have very few coop foreclosures because they are so tough to get into. Only the coop board can initiate a foreclosure not a lender. Aztec Aztech is the company that makes the recognition agreement forms the lenders use.

Hannah, Getting a mortgage is much easier than getting into a coop.

 

Oct 10, 2011 05:42 AM #4
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Rainmaker
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Mitchell J Hall

Lic Associate RE Broker - Manhattan & Brooklyn
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