How co-op loans work in New York City
When you buy a co-op you buy shares in the building, so you need both a lender and the co-op board to say yes. The board can limit how much you finance and require cash left over after closing, even if a lender would lend more.
What the board decides
- The most you can finance, written in the listing or the building's rules.
- How much cash and savings you must still have after closing.
- Approval of your application, financial statement and interview.
What the lender needs
- The building must be one the lender lends in. Ask before you bid.
- A recognition agreement signed by the co-op, the lender and you.
- The usual income, credit and appraisal checks.
Programs that allow co-ops
- SONYMA mortgages and DPAL can be used for co-ops, with a 3% cash contribution for co-ops.
- NYC HomeFirst can be used for co-ops in the five boroughs.
Questions people ask
- Do I pay the mansion tax on a co-op?
- Yes. The 1% mansion tax applies to co-op purchases of $1,000,000 or more, like other homes.
- Why do I need board approval if I have a loan?
- The board approves who can own shares and live in the building. A loan approval does not replace it.
Official sources
- New York State HCR, SONYMA programs ↗
- New York State HCR, SONYMA Down Payment Assistance Loan ↗
- NYC HPD, HomeFirst Down Payment Assistance ↗
- NY State Department of Taxation, Real estate transfer tax ↗
Facts checked 2026-11-01. General information, not financial, legal or tax advice. We are not a lender.