Sarah Martinez is purchasing a co-op apartment in Manhattan for $750,000. Her lender explains the financing structure for cooperative units. What type of loan will Sarah receive for this co-op purchase?
Correct Answer
C) A share loan secured by the cooperative shares and proprietary lease
Co-op financing in New York involves a share loan (also called a co-op loan) because the buyer is purchasing personal property (shares in the corporation) rather than real property. The loan is secured by the cooperative shares and the proprietary lease, not by real estate.
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Related Topics & Key Terms
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Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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