People who read the New York Times while also being interested in buying an apartment in Harlem, probably read their recent article on how Sugar Hill is still sweet and affordable, bla, bla, bla. While you need to do nothing more than check the NYT listings for available HDFC co-op units, you may need some help in figuring out if you qualify for one.
First, basics: how do you know a listing is an HDFC. Well, is the price ridiculously low for a NYC apartment? That’s your first clue. Your second will be toward the end of the listing where it says: this is in a HDFC building that has the following income restrictions…
While different HDFC buildings have different rules (and HDFC rules are just that: rules, not laws set by the city) most, I believe, will look at your current income, as well as the past two years tax returns to determine if you fall within the income restrictions. Few listings will list the minimum requirement, but it is entirely possible (though rare) that you be rejected for having a too-low income. Why would somebody without income even consider buying an apartment? Why, if they have cash, of course! Maybe you won the lottery, maybe you inherited or were gifted money. Or maybe you are retired and live on a fixed income but have a ton of savings.
But in that case, more often than not, accepting your offer will be at the building’s discretion. If you have lots of cash at your disposal through family connections, I personally don’t think you should be allowed to buy an HDFC because your situation is not what the program was intended to accommodate. But different HDFC’s will feel differently about that.
If an HDFC is requiring “ALL CASH DEALS ONLY” (as many listings pronounce) then that HDFC will likely welcome a trust fund baby. On the other hand, requiring an all cash deal may be due to weak or even distressed building financials – do you really want to buy into a distressed building? Don’t say ‘yes’ right away. Here’s what can happen to distressed HDFC’s. Clue: they can be foreclosed and turned into rentals.
When you go into an open house, I suggest asking the broker right away if a building can get financing from a bank. If the answer is yes, that’s good.