Getting a Loan for a Condo vs. a Co-op in NYC
Short answer: A condo mortgage is a loan on real estate; a co-op loan is a loan on shares. With a condo, you own your apartment outright, so the bank takes a mortgage on it, records it with the city, and you pay the mortgage recording tax. With a co-op, you own shares in the corporation that owns the building, so the bank lends against those shares and your lease, and the co-op board decides whether you can borrow and how much. In new condos, the city's records show what buyers do: 39% pay all cash, and those who finance borrow a median 73% of the price.
Condo Mortgage vs. Co-op Loan, Side by Side
| Condo | Co-op | |
|---|---|---|
| What you buy | Real estate: your apartment and a share of the common areas | Shares in the building's corporation, plus a proprietary lease for your apartment |
| What the bank holds | A mortgage on the apartment, recorded in ACRIS, the city's property records | Your shares and lease as collateral, with a UCC financing statement on file |
| Who limits your loan | The lender | The lender and the co-op board, which can set a minimum down payment |
| Board approval | Usually just a right of first refusal; the sponsor's own sales usually need no approval | The board approves every buyer and reviews your finances, loan included |
| Mortgage recording tax | 1.8% of loans under $500,000; 1.925% of loans of $500,000 or more | None: a share loan isn't a recorded mortgage |
| Title | Title insurance, with a lender's policy if you finance | A lien search instead of title insurance |
| Agreement with the building | None needed for a typical loan | A recognition agreement among the lender, the co-op and you |
The tax rates are the ones in closing costs for a new NYC condo; confirm them with your attorney before you sign.
How a Condo Mortgage Works
A condo is its own tax lot, so a condo loan works much like a loan on a house. The bank checks you, your income and the apartment's value, and it also reviews the building: its budget, insurance, how many units are sold and how many owners live there. In a new building that's still selling, some lenders won't lend until enough apartments are under contract, which is one reason many sponsors name a preferred lender that has already approved the building. See sponsors' preferred lenders, and check whether your mortgage contingency is tied to that lender.
At closing, the mortgage is recorded with the city, which is how we can see it. Matching every new condo sale we track to the loans recorded with it:
- 61% of buyers financed and 39% paid all cash. Since 2023, 50% paid cash.
- The median loan was 73% of the price, so the typical financed buyer put about 27% down. Only 5% borrowed 90% or more.
- The biggest lenders on new condos were Wells Fargo, JPMorgan Chase and Citizens Bank.
More in who pays cash for a new NYC condo.
The New-Condo Tax Trick: Taking Over the Developer's Loan
Because condo buyers pay the mortgage recording tax, some new developments let buyers use a CEMA (consolidation, extension and modification agreement). The developer's construction loan is already recorded on each apartment, so your bank takes over part of it and adds a new "gap" mortgage for the rest, and you pay mortgage tax only on the new money. 9% of financed new condo buyers we checked closed this way, and 13% since 2023. Ask the sponsor whether it offers a CEMA, and what it charges for it, before you sign. Co-op buyers have nothing to save here, since their loans don't pay the tax.
How a Co-op Loan Works
A co-op buyer doesn't get a deed, so there's no real estate to mortgage. The bank lends against your shares and proprietary lease, files a UCC financing statement, and signs a recognition agreement with the co-op, in which the co-op agrees to tell the bank if you fall behind on maintenance and lets it step in. Because the co-op's own finances back the bank's collateral, the lender also reviews the building: its budget, reserves and the mortgage the co-op itself carries.
The bigger difference is the board. A co-op board approves every buyer, and many set rules about financing: a minimum down payment, a cap on how much of the price you can borrow, or cash left in the bank after closing. Some buildings allow little or no financing at all. A bank can approve you and the board can still say no, without giving a reason. Ask for the building's financing rules before you bid.
New co-ops are rare. Most new apartment buildings in New York are condos; see condo vs. co-op in NYC and why developers still file new co-ops.
Which Is Easier to Finance?
- Borrowing a lot: a condo is usually easier. The lender alone decides how much you can borrow; a co-op board may require a bigger down payment.
- Closing costs: a co-op is usually cheaper to finance, with no mortgage recording tax and no title insurance. A condo buyer can cut the tax with a CEMA.
- Buying through an LLC or trust: condos generally allow it; most residential mortgages are made to people, and 75% of entity buyers in new condos paid cash. See buying in your own name vs. an LLC.
- Selling or refinancing later: a condo owner refinances with the lender alone; a co-op owner may need the board's consent for a new loan too.
How This Is Counted
The new condo figures come from the sponsor's first sale of each home in the 2,791 condo buildings we've matched to city records, closed from 2001 to 2026, with the loans recorded on each home's tax lot alongside the deed in ACRIS. A sale counts as financed when a mortgage, or a consolidation agreement naming the buyer as borrower, was recorded with it; "took over the developer's loan" means one of those agreements was part of the loan. Loan share is the loan amount divided by the deed price. Co-op loans aren't recorded as mortgages, so the city's records can't show how co-op buyers finance; the co-op sections describe how co-op loans usually work in New York, not a count. This is general information, not legal or financial advice.
FAQ
Is a co-op loan a mortgage?
Not technically. It's a loan secured by your shares in the co-op and your proprietary lease, often called a share loan. It works like a mortgage for you, with monthly payments and a rate, but it isn't recorded as a mortgage, so it doesn't pay the mortgage recording tax.
How much do you need to put down on a NYC co-op?
It depends on the building. The board sets its own rules, and many require a larger down payment than a lender would, or cash left over after closing. Ask before you bid.
How much do NYC condo buyers put down?
In new condos, financed buyers borrowed a median 73% of the price, putting about 27% down, and 39% paid all cash.
Do co-op buyers pay the mortgage recording tax?
No. Only loans recorded as mortgages on real estate pay it, so condo buyers who finance pay it and co-op buyers don't.
What is a CEMA on a new condo?
An agreement that lets your bank take over part of the developer's construction loan on your apartment, so you pay mortgage tax only on the new money. 9% of financed new condo buyers we checked used one.
Where this comes from: deeds, mortgages and consolidation agreements recorded in NYC's ACRIS records, matched to the offering plans on file, and New York State and NYC mortgage recording tax rates. Updated October 2026.
Related: Condo vs. Co-op in NYC: What the Offering Plans Show · Who Pays Cash for a New NYC Condo, and Who Gets a Mortgage