Cooperatives & Condominiums
The mortgage taken out by a NY cooperative corporation against the building, repaid through monthly maintenance fees.
In a NY co-op, the cooperative corporation typically holds a single 'underlying' mortgage against the building (which the corporation owns). Shareholders do not borrow this money individually — they pay their proportionate share through monthly maintenance fees. The underlying mortgage is one reason co-op maintenance is higher than condo common charges (which generally do not include a building-wide mortgage). The underlying mortgage's outstanding balance, refinance terms, and amortization schedule affect future maintenance fees and are major considerations for buyers reviewing a co-op's financials.
Exam Tip
Held by the CORPORATION, not individual shareholders. Repaid through maintenance — one reason co-op maintenance is higher than condo common charges.
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Co-ops & Condos
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