Cooperative Housing (also Housing Cooperative, Co-op, or Housing Company) consists of membership-based cooperatives or corporations that own real estate. They typically comprise one or more residential buildings and are a type of housing tenure. Cooperative housing provides the right for members to live in a certain residence. Both HUD 221(d)(4) and HUD 223(f) loans are equipped to fund cooperative housing properties, however, they are subject to certain additional requirements. Cooperative housing properties financed with HUD 221(d)(4) and HUD 223(f) are also fully eligible for HUD 223(a)(7) refinancing.

Living in a cooperative housing can provide many benefits, such as access to affordable housing, shared resources, and a sense of community. Cooperative housing can also provide access to amenities such as swimming pools, fitness centers, and other recreational facilities. Additionally, cooperative housing can provide access to services such as laundry, maintenance, and security. Finally, cooperative housing can provide access to financial benefits such as lower interest rates on loans and lower monthly payments.

For more information on the benefits of living in a cooperative housing, please visit this page.

Living in a cooperative housing can have some drawbacks. For example, cooperative housing members may be subject to certain restrictions on the amount of units owned by investors vs. the amount of units owned by residents. Additionally, cooperative housing members may be subject to certain rules and regulations set by the cooperative housing board. This can include restrictions on the types of renovations that can be done to the unit, as well as restrictions on the types of activities that can be done in the unit. Finally, cooperative housing members may be subject to certain fees and assessments that are not applicable to other types of housing.

Sources:

• HUD 221(d)(4) Loans - Cooperative Housing
• HUD 223(a)(7) Loans - Cooperative Housing

Cooperative housing is a type of housing tenure, or the right to live in a certain residence. It typically consists of one or more residential buildings owned by a membership-based cooperative or corporation. HUD 221(d)(4) loans can finance elevator-type cooperative housing, however, there may be certain restrictions on the amount of units owned by investors vs. the amount of units owned by residents. Due to this, borrowers who wish to build or substantially renovate a cooperative housing development should check with their lender and HUD to learn more.

To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form below and a HUD lending expert will get in touch.

Cooperative housing properties are eligible for HUD 221(d)(4) and HUD 223(f) loans, however, they are subject to certain additional requirements. These requirements include:

• HUD 221(d)(4) loans must have a Loan-to-Value (LTV) of 65%, or 55% of loan-to-sell-out value (HUD now allows a waiver for affordable cooperatives that cannot reach the 55% loan-to-sell-out value threshold)
• HUD 223(f) loans must have a Debt Service Coverage Ratio (DSCR) of 1.00x Minimum
• At least 75% of units must be owner-occupied (no more than 25% can be owned by investors)
• Repair Allowance of up to $40,500 per unit

Cooperative housing typically consists of one or more residential buildings and is a type of housing tenure. There are two main types of cooperative housing: elevator-type and non-elevator type. Elevator-type cooperative housing is eligible for HUD 221(d)(4) loans, while non-elevator type cooperative housing is eligible for HUD 223(f) loans. Both loan products are also eligible for HUD 223(a)(7) refinancing. For more information, please refer to the HUD 223(a)(7) Glossary and the HUD 221(d)(4) Glossary.