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Big MortgageAug 05, 2012

One reason I can see that the sponsor wants to take an additional $350K of equity out of the building is to increase the capital reserve fund. If Billy Joe heard somewhere that the sponsor was doing this to make the units more attractive to buyers, having a healthy reserve fund is an important factor. Co-op mortgage lenders look closely at building finances before committing. An anemic capital reserve fund makes it much more difficult for a perspective buyer to get a mortgage.

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