I'm thinking that this could be looked at slightly differently.

Everyone is looking for a home who's looking at co-ops. They're not looking for a rental, they're looking for something they can call their own.

Given the existing financial picture for home sales in the US, as well as the current employment picture, I'd say that potential Shareholders who are aware of their financial picture, willing to meet pre-conditions such as annual maintenance in escrow (and here, the Board has flexibility; it can require up to 5 years, for example, if any doubt exists on stability), and are still persistent and open to negotiation over terms (proof of liability insurance non-negotiable, as always)... may just be the kind of people you WANT in your building.

Co-ops are different than condos for a reason - their founding philosophy is vastly different. And that says - or should say - something about the "feel" of the building, and between its residents. I understand, and am all for, fiduciary responsibility first, second, and third - but let's not lose sight of the fact that the building as a whole is home to everyone in it. I think anyone would agree they'd much rather have residents who are interested in the building, interesting in its welfare, and interested in raising a family there, than having an empty apartment or one that's been on the market so long it makes the building look bad.

Another viewpoint heard from.

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In my Co-op (111 units, 85% owner occupied and 10 corporation owned renters being phased out), we tend to encourage first time home buyers. We allow 10% down. We look more at home ownership costs as a percent of income. This also allows for unit transfers even in a down market. Our finances are in great shape therefore we don't need to assess for capital improvements. Therefore we don't necessarily need the extra financial cushion other than the emergency assessment coverage on home owners' policies which we require. We only have two units in legal for back payment for maintenance: one is a chronic un-occupied unit for a person who formerly needed city occupancy and the other involves a reverse mortgage. My opinion is while protecting the remaining shareholders – don’t also be a roadblock either.

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I agree with all that you have stated. However, when you have an application in which your debt to income ratio is high, income is low and savings is similarly low for the current d/i, I would recommend that these individuals wait a year or two before taking a plunge OR look for a unit of lesser value that would satisfy their aspirations. Sometimes elimination or reduction of debt is better than looking for greater trouble.

I do not consider equity a problem: 0%, 10% 20% or 100% is not an issue if the mix is affordable to the individual at the end of the transaction. I had the experience of asking an escrow to a potential buyer who was giving 20% down. The person had a high d/i ratio,a good salary, no savings to speak of, and a high mortage+maintenance payment to make at the end of the transaction in spite of the 20% equity. The person was very upset with the escrow request and stated that 20% was sufficient to impress the Admission Committee. My response was as follows: ÿou could have given 10%, retain more cash in your savings for contingency or emergency and would have probably avoided the escrow.

Again, the mix and financial picture at end of the transaction is as important as the snap shot prior to purchase when dealing with these situations.

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