Coop refinancing requirements
We are in the process of refinancing our Coop apartment, which is in a 4 unit building. The bank, who we are dealing with directly, wants both an audited financial statement and an operating budget for the building. We have always done un-audited statements, and we do not do a operating budget. The same was…
We are in the process of refinancing our Coop apartment, which is in a 4 unit building. The bank, who we are dealing with directly, wants both an audited financial statement and an operating budget for the building. We have always done un-audited statements, and we do not do a operating budget. The same was true for another 4-unit coop we lived in.
We did not have to meet these requirements to buy our apartment with the same bank. The mortgage officer says that of course, “things have changed.” Have they really, or is the bank just applying national standards for large coop buildings unnecessarily to a small building? How should we proceed?
I concur with Adam. Banks have all but stopped lending/refinancing to 4 unit buildings. I just sold my unit in one and the buyer was all cash, thank goodness.
My neighbor was trying to refinance but ran into some trouble with the insurance policy. Seems the co-op’s building insurance was not for 100% replacement value under current valuation. (it was like 90% or something, not sure). The bank wouldn’t do it.
I would ask your mortgage broker for ALL the documentation that they are asking for. Every bank seems to have different things they nitpick on. But, if this is just the beginning of being asked for a ton of paperwork or being held to unreasonable standards that you can’t meet, you may want to know what you are getting into up front, rather than waste your time.
Just prepare a budget roughly based on past expenses and any known current expenses, and on current income, it’s not that hard.
You may already have an accountant who does a compilation of your financials – that’s pretty common for small buildings. If so, talk to them about doing audited financials. Maybe some brownstoners can recommend an accountant for small coops or you could contact the Council of NY coops and condos (www.cnyc.org) to see if they can make some recommendations.
Good luck!
Very few banks will lend on Coops with less than 6 units. Of those banks that will they will only do it for properties in the 5 boroughs.
They usually require 2 years financials along with a proposed budget by an accountant as well as the master insurance policy for the building.
I you email me the address I can check to see if it’s on our approved coop list.
adamdahill@gmail.com
Hire an accountant to perform an audit. Im sure with a 4 unit building the finances are not complciated and an therefore the audit fee should be minimal.