This is the question shareholders ask us in the one-on-one sessions, and it is usually asked quietly, near the end. The short answer is that your loan is dealt with at the closing and comes out the other side as a mortgage on a home you hold by deed. The longer answer is worth a few minutes, because most of what people expect to happen here does not happen.
FAQ · Costs & Financing
What Happens to My Co-op Share Loan When the Building Converts?
A co-op share loan doesn't carry over as-is when the building converts to condo, it becomes a mortgage on your individual unit. Here's how that transition actually works.
Written by David Boyajian, Vice President Updated September 2026
What happens to the loan you already have?
It gets folded into the new one. Your share loan today is secured by your shares in the corporation and by your proprietary lease, and what you hold in a co-op is stock, not real estate. At the conversion you exchange those shares for a deed to your own unit, which is real property with its own mortgage and its own tax bill. An existing share loan is wrapped into the new condominium mortgage at that point, alongside your share of the building's underlying mortgage, the conversion fee and the closing costs.
What if you do not have a loan at all?
You still have one, and you have been paying it every month. A co-op's underlying mortgage sits on the whole building, and a portion of the maintenance you pay goes to service it. You are not buying your apartment back from anybody at the conversion. You are exchanging shares for a deed, and the financing consolidates that existing piece of the building's mortgage, whatever else is already owed on the unit, and the cost of converting into one loan in your own name.
Will you need cash at the closing?
Our conversions are structured so that you do not. Every shareholder is offered the chance to be pre-qualified for the whole conversion obligation, and it is financed through our lead lender or through a lender of their own choosing. In almost every case the monthly outlay for a unit as a condominium comes out about where it was as a co-op, with the difference that the owner now holds real property.
Will you have to qualify all over again?
Our plan is built so that you are not required to refinance a mortgage you already hold. Where a lender will reaffirm the same collateral, the unit, in its new form as a condominium, the loan you have stays where it is. That part involves your lender and we do not promise their answer, so we carry contingency arrangements that let the conversion finish either way. We also apply for Fannie Mae project approval for the building, whose standards most lenders follow, which opens the unit to lenders who will not write a loan against co-op shares at all.
What about a reverse mortgage?
It is very uncommon now for a co-op shareholder to have access to one. Through the conversion we can arrange that access. It is often available at the co-op to condominium closing itself. For an owner who intends to stay in their home and has watched its value sit still for years, that is frequently the whole of the case for converting.
Who should you be talking to?
Us, and your own lender, and in that order. We can tell you how the conversion changes the form of the debt and when each piece of it moves, which is the part a lender cannot see from the outside. Your lender is the only one who can tell you the terms you personally qualify for.
Nobody should have to work this out from a notice on a lobby board. Before a building votes on anything, we prepare an individual report for every household showing the difference in valuation and in monthly cash flow for that unit, and we sit down with you to go through it. Your own page is the one that answers this question.
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