YOUR FINANCIALS: WHAT BOARDS LOOK FOR, P.2

Finally, in terms of analyzing your financials, boards often look beyond your housing debt and consider other debts you're carrying, such as student loans, car loans or another mortgage. Shernicoff recalls that at his own Upper West Side Manhattan co-op the board has a policy forbidding interest-only loans. "They put people in a hole," he explains. "We want people to be reducing their obligation, not increasing it."

Outside factors weigh in as well. Location, for instance: A middle-income building in Brooklyn or Queens, for example, is less likely to look at deep-pocket assets and more likely permit financing for much of the deal than a Park Avenue building in Manhattan would be. And all things being equal, a large building is easier to buy into than a small one. "If you have a 200-unit building and you're getting stiffed by two people, that's not that big of an impact," observes Tom Sahagian, a former board member at two Manhattan co-ops on the Upper West Side. "But if you're a 20-unit building and you're getting stiffed by two people, that's a huge impact."

Dissin' Kids

Boards do all this for a simple reason: to protect the co-op. They cannot discriminate, but they must be discriminating. That means choosing people who are the right fit, financially and otherwise.

They can't violate the law in doing that, of course. You can't be turned down because of race, creed, color, religion, sexual orientation or, less well-known, because you have children. "It is illegal to deny housing to a party because they have children," observes Sirota. "It would seem obvious to any of us that denying housing on the basis of gender or race is just bigotry and wrong. And yet [the] children [prohibition] is something that people might not be aware of. Someone might say, 'Oh, children, you know, we have such a quiet building, do we want children here?' That's not a question you can even ask or answer."

Your financials are not just key, also a sort of key. "I don't want my clients to meet with the candidate unless they are already okay with the financials," says Adam Leitman Bailey, an attorney in private practice. "If the financials aren't acceptable to you," he advises boards, "do not meet with the candidate…. If you don't know what color they are and you reject them, you're really protected in the decision you're making. In other words, financials are the entrance fee."

Adapted from Habitat April 2007. For the complete article and more, join our Archive >>

Art by Danny Hellman