You found the right place in Queens, but now you need the right loan. Financing a co-op is not the same as financing a condo, and those differences change your loan options, closing costs, and timeline. If you understand these shifts up front, you can plan your budget and avoid surprises. This guide breaks down what changes when you buy a Queens co-op versus a condo and how to move forward with confidence. Let’s dive in.
What you own and why it matters
Condo ownership gives you a deed to your unit and an undivided interest in the building’s common areas. Your loan is a mortgage recorded against real property. Local buyer guides explain this structure.
Co-op ownership is different. You buy shares in a cooperative corporation and receive a proprietary lease for your apartment. Your financing is a “share loan,” secured by the shares and the lease, not a real estate mortgage. Fannie Mae’s rules reflect this distinction in how lenders must review and approve co-op projects before lending on them (co-op project eligibility).
Why it matters for you: condos use standard mortgage structures many lenders know well. Co-ops use share loans that fewer lenders offer and that come with extra building-level scrutiny and paperwork.
Loan programs: what works in Queens
- FHA: FHA insures loans for individual condo units only if the building is FHA-approved. FHA’s common single-family programs do not insure routine share loans for individual co-op purchases (HUD program overview).
- VA: VA loans are available for eligible condos that meet VA project rules. They generally are not available for co-ops, except in rare cases (VA policy discussion).
- Conventional (Fannie Mae/Freddie Mac): Lenders can originate condo mortgages widely. Co-op share loans are eligible only when the co-op meets detailed agency project requirements and when the lender is approved to deliver these loans to Fannie or Freddie (Fannie Mae co-op project eligibility). In practice, fewer lenders do co-op share loans, so pricing and timelines can differ.
What this means for you: condos typically offer broader product choice and competitive pricing. Co-ops are financeable but often through a narrower lender set, with more building documentation and approval steps.
Underwriting and board approval
Co-op buildings and boards look beyond your credit score. They review your full financial profile and the co-op’s financial health.
- Down payment and reserves: Many NYC condos close with 10 to 20 percent down. Co-ops commonly require 20 to 30 percent or more. Some buildings set higher floors, and many ask to see 12 to 24 months of post-closing liquidity. Lenders and boards also watch your debt-to-income ratio closely (DTI and reserve norms).
- Board package and interview: A co-op approval is separate from your lender approval. Expect a full board package, references, and a potential interview. Condos rarely require interviews for owner purchases, so they often move faster (co-op vs condo process overview).
- Building review: Lenders evaluate the building’s financials, reserves, insurance, owner-occupancy, litigation, and any special assessments. Co-ops must meet agency and lender rules to remain eligible for conventional financing (Fannie Mae co-op project eligibility).
- Recognition agreement and UCC filings: Co-op loans require a recognition agreement signed by the co-op corporation and UCC filings at closing. These add time and legal fees to the process (sample recognition agreement context).
Closing costs and transfer taxes
Several line items differ between condos and co-ops in Queens:
- Mortgage recording tax and title insurance: Condo buyers typically pay the NYC and NYS mortgage recording tax and purchase title insurance because the loan is recorded against real property. Co-op share loans generally do not trigger the mortgage recording tax, and title insurance tied to a unit deed is not typical for co-ops.
- Co-op specific fees: Expect recognition agreement fees, stock transfer fees, UCC filing fees, move-in deposits, and in some buildings, flip taxes. These charges can offset some savings from avoiding mortgage recording tax (NY AAREA buyer guide).
- NYC Real Property Transfer Tax (RPTT): NYC taxes apply to deeds and, in many cases, to co-op stock transfers. Rates and who pays vary by deal structure, so confirm specifics with your attorney and consult NYC Department of Finance guidance (NYC RPTT overview).
Monthly costs and tax treatment
- Co-op maintenance: Maintenance typically includes your share of building real estate taxes, insurance, staff, and the building’s underlying mortgage interest if any. A portion may be tax-deductible based on the co-op’s annual statement (maintenance composition overview).
- Condo common charges: Common charges cover building operations and amenities, while you pay your unit’s property taxes separately and handle deductions under federal rules.
For budgeting, compare apples to apples: maintenance plus any underlying mortgage allocation in a co-op versus common charges plus property taxes in a condo.
Queens loan sizes and conforming limits
Queens follows the high-cost conforming limits for many New York City counties. For 2025, the one-unit high-cost ceiling example is $1,209,750, which affects whether you need a jumbo or portfolio loan and how pricing and underwriting may change. Always verify the current limit before you shop (Fannie Mae loan limits).
Timelines and contingencies
Co-op purchases often take longer than comparable condo purchases. Building approval, board interviews, recognition agreements, and UCC filings add steps. Give yourself extra weeks for board review and align your financing and board-approval contingencies with realistic milestones (process overview).
How to decide: co-op or condo
Use your goals, budget, and timeline to guide the choice.
- Choose a co-op if you value price efficiency, potentially lower closing costs, and you can meet higher down payment and liquidity standards.
- Choose a condo if you need broader loan options, faster approvals, or more long-term flexibility.
- For either option, verify building eligibility early. Ask your lender to review the building’s financials and any agency eligibility requirements so you avoid last-minute surprises (Fannie Mae co-op project eligibility).
Your next steps
- Get pre-approved with a lender that actively finances your target property type, especially if you are considering co-ops.
- Ask early about building rules: minimum down payment, reserve requirements, any pending assessments, and whether the project is eligible for conventional delivery.
- Model your monthly costs side by side: co-op maintenance versus condo common charges plus property taxes.
- Align your contract contingencies with the expected board and lender timelines.
Ready to compare buildings in Queens and choose the right financing path? Connect with Nadine Nassar for a tailored plan, clear numbers, and a step-by-step strategy from offer to close.
FAQs
Can I use FHA to buy a Queens co-op?
- Generally no. FHA’s common single-family programs insure approved condo units but not routine co-op share loans for individual buyers (HUD program overview).
Are VA loans available for Queens co-ops?
- Typically not. VA loans are widely used for VA-approved condos but are generally unavailable for co-ops except in limited cases (VA policy discussion).
What closing costs differ most between co-ops and condos in Queens?
- Condo buyers usually pay mortgage recording tax and title insurance, while co-op buyers avoid the recording tax but often pay recognition, UCC, and transfer-related fees, and sometimes flip taxes (NYC RPTT overview; NY AAREA buyer guide).
How much down payment and reserves do Queens co-ops expect?
- Many co-ops require 20 to 30 percent down and ask for 12 to 24 months of post-closing liquidity, subject to the building’s rules and lender overlays (reserve norms).
Why can a building be labeled non-warrantable?
- Buildings can fall outside agency eligibility due to factors like low owner-occupancy, major unfunded repairs, significant litigation, or high sponsor concentration, which pushes buyers to portfolio or specialty lenders (Fannie Mae co-op project eligibility).
