A Condominium is administered by an association of unit owners according
to by-laws set forth in the declaration. The owners are bound by these
by-laws and the association may be governed by a Board of Directors.
As stockholders, the tenants of a Cooperative exercise control over the
administration of the building. Barring discrimination, the Board may
approve or disapprove prospective tenants or purchasers of apartment leases.
For a Condominium, financing would be the same as a single family house.
The owner can mortgage his or her interest in the condo.
For a Cooperative, financing is arranged by borrowing against the stock.
Lending institutions often have different criteria for co-op loans. The
original, underlying mortgage on the entire co-op is signed by the corporation
creating a lien on the entire parcel of real estate.
Real estate taxes, are assessed and collected on each unit owner of a
Condominium. With a Cooperative, the building taxes are assessed against
the corporation and included in the shareholders monthly maintenance fee.
A condominium has no requirements other than the borrowers ability to
secure a mortgage, if applicable. A Cooperative will generally require
a 4 to 1 ratio. This means the perspective purchaser must show documented
earnings of 4 times their monthly carrying costs, including mortgage,
maintenance, and all revolving monthly debt (i.e. car loans, alimony,
child support, student loans, credit card debt).