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I live in a 60 unit Co-op building in nyc. We went co-op in 1986. The sponsor still owns 49% of the units. We have not had a sale in the last 6 years that required financing, all have been cash deals and limited to 1 bedrooms. I have a four bedroom and have just listed my apartment.
Is there any way to find out if our building is on a due not lend list with major banks? Im afraid we won’t be able to sell because buyers can’t get financing from major banks due to the building sponsor.
I did raise this to the property manager who is also the sponsor and they pointed out they could provide financing to credit worthy people through a bank that the principal of the sponsor runs.
Any thoughts?
I bought into a building in the East Village with a sponsorship rate of 46% last year. Chase wouldn't give me a loan for fear of the high sponsorship rate. The mortgage broker went through a lot of research and eventually got me a mortgage through "Community National Bank" in Great, Neck, NY (Long Island). It seems to be a smallish bank. From what the mortgage broker told me you need to go to smaller banks in order to get a loan for a building like that. Also, it kind of sucks for selling your apartment. But maybe tell them about CNB, they did not seem to mind the sponsor and I got a good rate.
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My coop had 86 units, 30 still in the sponsor hands. We had a record number of sales last year, about 6, and 3 this year so far. I believe JP Morgan Chase and Wells Fargo are offering mortgages. I don't recall seeing any other banks recently. The banks often keep files on the buildings, if you can locate the phone contacts for these bank's mortgage departments, you can find out what they have for your building, if anything. A 'co-op questionaire' is usually required to be completed from the property as well as last 2-3 years financials and budgets, prospectus and amendments. Maybe a real estate broker involved with coops can advise you where their clients have been able to obtain mortgages in your area. I've never heard of a do not lend list within the banks. However, Fannie Mae has tightened up a lot since the financial fiasco and the mortgages may not be eligible to be resold to Fannie Mae. So the bank would have to hold the mortgage themselves until satisifed.
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