lender may require a shorter loan term. This is because mobile homes depreciate in value similarly as a car or recreational vehicle, whereas a single-family house will commonly go up in value. Since a mobile home can only go down in value, the lender will want the mortgage paid off sooner than a traditional home. Cooperatives (Co-ops): A co-op is similar to a condo in that there are multiple people living in one complex. However, with a condo you are buying your unit — you own the unit and can do with it as you wish, within the guidelines of the condo association. When you don’t want to live there anymore, you can sell the condo to someone else, because it’s your property. If your unit went up in value in the time that you lived there, you reap the benefits of selling the property for more than you originally paid. With a co-op you don’t own your own unit. Instead, everyone who lives in the co-op pays to become a shareholder in the entire collective of units. As part of your shareholder status, you get access to one of the housing units. This means that a person who lives in a co-op unit is not actually an owner of the unit. Therefore, a co-op unit is not real property. This unique arrangement makes co-op loans even more complicated than condos. The same issues apply to co-ops as to condos — inadequate reserves, damage to the property, people not paying their dues, etc. — but with the added difficulty of navigating how to mortgage property that isn’t tangibly real in the eyes of the law. As such, many lenders simply refuse to lend on co-ops. Co-ops are just too complicated. If your buyer is buying a co-op, make sure your lender is well-versed in co-op loans or you might not even make it past the origination stage.
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