Co-Op Loans
Condominiums are a type of property in which people own their apartment in a building with many apartments. Shared areas such as parking lots, driveways, elevators, and recreational areas are collectively owned by all owners. They are common in major metropolitan areas and require a special type of mortgage.
There are several problems with this type of mortgage: most will require the building to be less than four stories and have more than half of the apartments occupied by their actual owners.
To address this problem, owners will commonly work together to form a cooperative corporation (co-op), which then has legal ownership of the building.
Many co-ops will get a ten-year, interest only mortgage, with the balance due at the end of the loan, or a balloon loan, and then refinance the loan balance.
Individual who become part of this co-op can get a co-op loan, which allows them to buy shares of the cooperative corporation.