HDFC Coops -Affordable Home Ownership in Manhattan
Q: What is an HDFC coop?
A: HDFC (Housing Development & Finance Corporation) Coops are a liittle known niche market in New York City Real Estate that are city sponsored and sell below market (40%-50% below non HDFC comparable coops and condos.
If you qualify an HDFC coop may be right for you. It may be a great deal.
HDFC coops are a form of limited equity home ownership. HDFC coops offer many of the same benefits as regular coops but they have some eligibility (income) restrictions and many have a "flip tax" paid by the seller. Since they are sold below market as well as the maintenance being kept low because the city reduces real estate tax on HDFC coops upon selling a portion of the profit is shared with the coop hence flip tax.
Because HDFC coops were originally set up as "affordable" housing they must still remain affordable so a buyer must qualify financially. An HDFC coop must be a primary residence and the income restrictions are based on area median income standards. In most HDFC coops 120% or 165% of area median income appplies.
Therefore individual HDFC coops can have different income requirements. It also varies depending on the size of family. A family of five can have a much higher income than one person. Those below 120% of ADI are "low income" rather than "moderate" or middle class.
The cost of owning shares in a coperative include theapartment maintenance, the monthly payments on any loan used to purchase the shares, utilities, and homeowners insurance. Generally buyers should not pay more than 30% of their monthly gross income in housing costs. HDFC boards have the same discretion to approve or reject a buyer like any regular coop.
If qualified, an HDFC coop represents a great opportunity to own a piece of the "greatest city in the world" at a fraction of the price of other coops and condos but with that comes some restrictions on purchasing and upon selling you often have to give a portion of your profit back to the coop and/or the city.
When buying or selling an HDFC Coop it is important to use a broker that understands the rules, restrictions and nuances of HDFC coops.
If you would like more information about buying or selling an HDFC coop please contact me.