Once you have an approved project, with engineered drawings more or less ready to go, and have a builder lined up, then the banks will talk about giving you a project loan. Coop vs. Condo. Banks first look at your legal ownership model. In general, cooperatives have a much harder time finding bank underwriting than condominiums do, although this varies around the country so be sure to check your local banks. Banks understand and deal with condominiums on a regular basis, and the advantage to the bank is that each condominium has a single owner.
Cooperatives hold a blanket mortgage on the whole project.
If condominiums are overbuilt in your area, or if there is a large vacancy rate in local condominium projects, you may have extra problems finding a lender. For more information about forms of ownership click here . When you approach banks, go to the main office first. Each bank usually has specialty people that have expertise in certain areas. Ask for the specialist who does condominium loans, or business venture loans, or construction loans.