Co-Purchasing a Co-op vs Using a Guarantor in NYC (2025)

September 13, 2025 by Georges Benoliel

Both co-purchasing a co-op and using a guarantor when buying a co-op are viable options for buyers with shaky finances that might not qualify for approval by the co-op board on their Co-Purchasing a Co-op vs Using a Guarantor own.

It’s important to understand that co-purchasers share joint responsibility for all loan payments, monthly maintenance fees, and any special assessments.
In contrast, a guarantor is only responsible for covering the buyer’s monthly maintenance charges.

What Does Co-Purchasing a Co-op Mean?

Co-purchasing a co-op apartment involves two or more individuals buying a co-op apartment together. When two people co-purchase a co-op, both of their names appear on the co-op stock certificate and on the co-op proprietary lease. Unless specified otherwise by the buyers’ attorney, the co-purchasers will be listed jointly on both the stock certificate and the proprietary lease, meaning they are considered equal co-owners of the co-op shares.

Co-purchasing a co-op is common among couples looking to buy a new home together, but it can also occur between a parent and a child.

Co-purchasing a co-op with a child

Parents who are co-purchasing a cooperative apartment with their adult children should understand that they will share responsibility for maintenance payments and any special assessments. Additionally, if they want to finance the purchase, they will need to be co-borrowers on the loan.

Co-purchasing a co-op for an adult child who needs financial assistance is not as straightforward as simply adding your name and credit information. As a co-owner of the apartment, you will be liable for all payments and expenses associated with the property from the time of purchase.

This reduces your future capacity to borrow.

Keep in mind that your credit score and borrowing capacity could be affected if you co-purchase a cooperative apartment with your child, especially if you are financing the purchase. Adding a large, non-conforming loan to your credit profile may reduce your future borrowing ability. This could impact your plans if you decide to buy a home solely for yourself to retire in.

Banks require co-purchasers to be co-borrowers

Don’t assume you can avoid being a co-borrower. Banks typically require co-purchasers of apartments also to be co-borrowers, making them jointly responsible for any mortgage on the property.

Buying a Co-op with a Guarantor

Buying a co-op with a guarantor means that while you will be purchasing the apartment independently, a guarantor will cover your monthly maintenance payments. This concept is similar to having a guarantor when renting an apartment. Co-ops may require a guarantor if they believe your financial situation is uncertain or does not fully meet their specific financial requirements.

Just as with rentals, the co-op board may require you to provide a personal guarantor to ensure your maintenance payments are covered. It’s important to remember that you will be the only person on the co-op’s stock and lease agreements, meaning you will remain the sole owner of the co-op apartment.

The guarantor isn’t responsible for your loan payments

It’s important to understand that the guarantor is only responsible for covering your co-op’s monthly maintenance fees. This means that the guarantor is not a co-borrower on your mortgage and will not be responsible for making payments to the bank on your behalf.

This arrangement can actually benefit the guarantor because it does not impact their borrowing capacity, particularly regarding the loan payments associated with your apartment appearing on their credit profile.

Who are guarantors usually?

Being a guarantor entails significant responsibility, as it means taking on the obligation to cover your monthly co-op maintenance payments if you cannot. If you fail to pay these charges, your guarantor will be responsible for making the payments on your behalf.

Typically, the individuals willing to assume this burden are parents or relatives who are buying on behalf of their children or other family members.

Moreover, guarantors must be financially qualified to ensure they fulfill their role effectively. This usually means they need to provide the co-op board with financial documentation to demonstrate a stable annual income, typically exceeding 40 times the monthly maintenance fees.

While guarantors generally won’t need to submit a complete co-op board package, they can expect to undergo financial scrutiny. They should be prepared to provide tax returns, pay stubs, bank statements, and potentially a REBNY Financial Statement for the co-op board’s review.

Co-Purchase vs Guarantor

When to have a guarantor vs a co-purchaser

Choosing a guarantor instead of a co-purchaser can be beneficial if you want to be the sole buyer of a co-op apartment. Still, the co-op board is concerned about your financial situation, particularly your debt-to-income ratio or post-closing liquidity.

In this scenario, you might still be able to buy the apartment alone if the co-op board allows a guarantor to cover your maintenance charges.

A typical example is when parents want to assist their adult child in purchasing their own apartment, possibly by gifting money for the down payment, if the co-op permits this. The parent may prefer not to be listed on the stock and lease with the child for reasons such as estate tax considerations.

When co-purchasing makes sense vs a guarantor

Co-purchasing a co-op apartment is more sensible when the goal is for both parties to live in the apartment together. Alternatively, if one co-buyer does not intend to reside in the apartment but wants to invest or have an ownership stake, it can still make sense to co-purchase. For instance, a parent might buy the condo for their adult child while remaining a co-owner, even if the parent finances most or all of the purchase.

The parents may want to retain some equity in the apartment in case issues arise between their adult child and the child’s future spouse. Often, the parents are not concerned about estate taxes because their net worth is below the estate tax threshold, so they prefer to maintain control over more of their assets.

Do All Co-ops Allow Guarantors?

Not all co-ops allow the use of guarantors, co-purchasing, or gifting. Each co-op establishes its own rules and financial requirements. Therefore, you should not assume that you can use a guarantor when purchasing a co-op in NYC, especially if you are in a financially precarious situation.

Why wouldn’t a co-op allow guarantors?

Co-op boards have the authority to reject prospective buyers for any reason, as long as it is not discriminatory. In practice, however, there are no protections against discrimination because co-ops are not required to disclose the reason for rejection, which they often avoid for liability reasons.

One possible explanation for rejecting guarantors could be that the co-op board wants to minimize risk. They may be concerned about someone who is already financially unstable, even if their guarantor has a more stable financial situation.

Additionally, they might worry about the guarantor dying or becoming unavailable, which could leave them in a difficult position. Alternatively, the board’s refusal to allow guarantors could stem from a certain elitism; they may prefer not to accept buyers who need a guarantor in the first place.

Why do some co-ops allow guarantors?

Some co-ops allow guarantors because they wisely deduce that allowing guarantors widens the buyer base for every unit in their building, and doing so benefits their shareholder tenants by increasing the marketability and value of their apartments.

More insidiously, a co-op board may suddenly allow guarantors because one of the board members needs to sell, and as a result they’ll change the policy out of self-interest, at least for a time until they’ve helped themselves out.

Tags: Buying in NYC

Written By: Georges Benoliel

Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.

The Nest

NestApple's Real Estate Blog