What’s the Difference Between a Condo and a Co-op?

When you buy a condo, you’re purchasing a piece of property: the actual unit or room in the building. Once you close on the transaction, the condo is yours, and you hold the title and deed to your specific unit in the building.

Co-ops, on the other hand, represent shares in a housing corporation. Although buying a co-op typically grants you the right to inhabit the specified unit in the building, you don’t actually own that property. Instead, you own a percentage of the corporation that manages the building.

As a result of these key differences, mortgage lenders treat condo and co-op purchases differently when underwriting and approving loans.

What is a share loan?

Similar to a mortgage, a share loan provides you with funds to buy shares of stock in the cooperative and the accompanying occupancy rights to a specific unit.