Sarah is purchasing a co-op apartment in Manhattan for $850,000. Her lender explains the financing structure for cooperative apartments. What type of loan will Sarah receive for this purchase?
Correct Answer
C) A share loan secured by the stock certificate and proprietary lease
Co-op purchases in New York require share loans, not traditional mortgages, because the buyer is purchasing personal property (shares in the cooperative corporation) rather than real property. The loan is secured by the stock certificate and proprietary lease, not by real estate.
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