Sure convert to condo, but with eyes open.

But if you have a mortgage, then the shareholders need to “eat” the mortgage burden to convert.

So someone has a coop loan.
For argument sake let’s say there is $100,000 outstanding on the principal.

Then let’s say this is a 400 unit coop.
Then let’s say there is an $8,000,000 outstanding principal on the coop’s mortgage.
This means, on average, each unit needs to assume $20,000 of the unpaid principal.

Now be very honest.
Have capital improvements been performed as defined by an outside professional engineering firm or have the prior boards deferred needed expenditure?
If expenditures have been nil or deferred, then in converting you will need to obtain an additional influx of capital to provide the basis for funding all the ignored capital improvements.
Let’s say that $10,000,000 in capital improvements have been placed on the back burner for future generations to fund, but the past is now.
On average, each unit will need to underwrite $25,000 for these unfunded capital improvements.

Then, let’s not forget the converter’s fees; these will be somewhere between $2,000 to $3,000 (I would say regardless of the firm) per unit. Not much but still a sum that needs to be funded.

Then there’s costs to the coop corporation for attorney fees (new bylaws, etc.), bank closing costs to retire the mortgage sooner than anticipated (if this is the case), engineering study, etc. Let’s use $1,000 per unit average.

Finally, some closing costs for the shareholders, including title insurance, etc. Let’s use $1,000.

OK, let’s recap.

$ 100,000 unpaid shareholder loan principal.
20,000 outstanding portion of coop corporate loan
25,000 unfunded capital expenditures
2,000 converter fee
1,000 coop corporate costs
1,000 closing costs
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$ 149,000 cost to convert average shareholder
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Yes, the shareholder can typically take a condo mortgage to fund the above amount in total. But, we need to very honest and open as to the full burden of costs.

Yes, a condo mortgage is typically a bit less, about .25% than a coop loan.

Yes, many banks will make a forecast of the “new condo” value of the unit and thus the higher assessment (by the bank) will allow for a higher mortgage principal.

Yes, the shareholder can “roll” all the costs into a new mortgage.

Yes, condo’s command higher prices.

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Yes, there are reverse mortgages for those over 62, but do please remember that if you elect to follow the path of converting from c0cop to condo, you are promoting a conversion and not mortgages, not reverse mortgages, etc.

Yes, typically for a small number of shareholders there are tax implications, e.g.: the conversion transaction is not tax free. Many converters seem to gloss over this issue

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Not trying to dissuade you from converting. Just trying to make you aware of the full burden that all face.