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While many financial institutions are still licking their wounds, the co-op sector continues to be a credit-worthy customer. As a result,NCB, whose client base is in co-ops, experienced very few problems compared to other lenders, says managing director Ed Howe.
NCB managing director Ed Howe
We couldn't meet Ed on site, so we used a little Photoshop to put him outside. (Remember when we had to use our imagination, aka the Dark Ages.) The bank—which has 4,000 of the 7,000 co-op properties in the metro area as clients—originated over $570M in underlying mortgage financing in the NY market last year, Ed says. He’s seeing co-ops refinance as early as possible to lower interest rates and borrow additional money for capital needs. Rates have dropped a record three percentage points from a decade ago to 4.75% today. Co-op deals NCB has recently financed include: a $2.3M first mortgage with a $300k line of credit for the 109-unit 67-87 and 68-09 Booth St (above) in Forest Hills, Queens; a $2.5M first mortgage and $500k line of credit for the 63-unit 6300 Riverdale Ave(below) in the Bronx; and a $1.8M first mortgage for 155 Tenants Corp, a 72 unit co-op at 155 E 93rd St.
6300 Riverdale Ave, Bronx, NY
Since 1987, there have been fewer than 15 co-op conversions, but as NYC’s residential stock gets older and needs new roofs and other renovations, Ed says “the cooperative model provides a number of advantages for communities when addressing building’s major capital projects.” The reason: co-ops are able to leverage the land and building as collateral, making it more attractive for lenders to finance. Since underlying mortgages have longer amortization periods (typically 30 years), the cost to individual shareholders is generally nominal, and provides a great alternative to costlier assessments required in condo properties.
Related Topics: Forest Hills, Tenants Corp