What You Need to Know About HDFC Coop Income Limits in NYC

How do I calculate the maximum HDFC coop income limit? What are HDFC coop income limits and rules in NYC? We’ll go through sample HDFC coop income limit rules and calculations with you in this article so you’ll know exactly what you’re getting into before you decide to make an offer on an HDFC apartment.

4 min readSep 28, 2018

Original Article: https://www.hauseit.com/hdfc-coop-income-limit-explained-nyc/

Competition for HDFC Coop Apartments

Competition for HDFC coop apartments in NYC can be fierce. That’s because HDFC coop apartments are generally cheaper on a price per square foot basis vs. comparable co op or condo units. HDFC co op apartment prices are generally lower due to the high flip taxes charged by HDFC buildings and the strict income limitations for buyers.

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Asset Rich and Income Poor

Despite these additional hurdles, there are many buyers in the NYC real estate market who have low income but substantial assets who qualify. These may include people with large inheritances, savings or who are able to get gifts from family.

As a result, you may see students or other people with low income but the ability to compete effectively for HDFC coops by making all cash offers! As a result, prices have trended up for HDFC coop housing in recent years, and it’s important for buyers to analyze whether valuations make sense before purchasing.

Part of the analysis should focus on how strict the HDFC building’s income limits are and how high the HDFC building’s flip taxes are. If the maximum allowable income for buyers is extremely low, it will be tougher to resell the apartment in the future given the more limited pool of eligible buyers. A higher co op flip tax will also effect resale value, not only by reducing the seller’s profit but by deterring would be buyers.

Sample HDFC Coop Income Limit Calculation

In this section we’ll do an example calculation based on the sample HDFC coop income limit rules from the previous section. The first step is to establish what the HDFC building’s income limit is. Sections 1 and 2 (Estimated Monthly Rental and Utilities) are further defined in the Instruction Sheet. You’ll see that the Estimated Monthly Rental is simply the apartment’s maintenance fee at the time of application.

What Are the Typical NYC Co-op Financial Requirements?

Cost of Utilities

The Utilities are simply the monthly cost of utility bills that you must pay which is not included in your monthly co op maintenance charges.

While you can easily do a rough estimate with information on hand, please note that these figures are to be officially provided by the HDFC building. For this example, let’s assume that the monthly maintenance is $700 and the monthly utility bills sum to $150.

Per the instructions on Line 3, you would add these two up to get $850. Line 4 asks you to multiply this figure by 12 to get $10,200. Let’s assume the purchase price is $600,000 for Line 5. So 6% of the purchase price is $36,000. Line 6 asks you to add up Lines 4 and 5 to get $46,200.

The next part is interesting. You can multiply $46,200 by 6 or 7 depending on how many dependents there are. If there are 3 or more dependents, you can multiply by 7. If there are 1 or 2 dependents, you can multiply by 6. It’s important to examine in Instruction Sheet to notice that even if you have 0 dependents, you can still multiply by 6!

Let’s assume the buyer is single and will be the only applicant and occupant. In this case, we will multiply $46,200 by 6 to get $277,200. Per Line 8, $277,200 is the Maximum Allowable Annual Income for this specific HDFC co op building!

The maximum allowable income for this particular HDFC coop building is quite high. Don’t expect income limits for HDFC buildings to always be quite so generous. It’s quite common to see income limits as low as $40,000 or $50,000.

Process of Buying a HDFC Coop in NYC

Don’t let anyone fool you into thinking that the process of buying or selling a HDFC coop vs a regular coop is much more complicated. Sure, the board will obviously need to be very careful around co op board approval in regards to checking that the buyer’s income is within limits.

This is obvious given the severe consequences of approving buyers that do not meet the income guidelines which include the loss of special NYC real estate tax breaks for HDFC coop buildings.

The Complete Guide to Buying a Co-op in NYC | Co-op Purchase Process (2018)

HDFC Coop Buying Process

However, the process of buying a HDFC coop apartment is otherwise pretty similar to the process of buying a coop that does not have income restrictions.

You’ll still need to submit a co op board package and pass a co op board interview. Read our Complete Guide to Buying a Coop in NYC to learn much more!

Original Article: https://www.hauseit.com/hdfc-coop-income-limit-explained-nyc/

Disclosure: Hauseit and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).




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