Can I finance a co-op purchase with a mortgage?
Technically, no: Because co-op owners do not own real estate, the financing process is slightly different from a standard mortgage application. Rather than apply for a home mortgage loan, you’ll need to take out something called a share loan instead. During the application process, you’ll provide information to your lender about how the co-op operates. The lender will also look into the board of directors and take a look at the underlying mortgage. Some co-ops already have existing relationships with certain lenders, which can make the financing process much easier. This all said, because the share loan provides you with a place to live, financing a co-op has the same end result as financing a condominium – you acquire a home that you own.