Negative Pledge Loans

Negative Pledge Financing

Negative pledge financing is a loan that allows you to purchase a co-op and finance up to 80% of your loan regardless of a co-op board’s deposit restrictions. It is most often used when purchasing a Co-Op in New York City.

Most co-op boards have policies in place that restrict what percentage of financing you are allowed to obtain when purchasing a co-op in their building. They can require a cash deposit of 25-75%. This restricts your ability to use that money for other purposes.

What are the benefits of a Negative Pledge Loan?

Negative Pledge Loans are an effective strategy for buyers who have the monthly income, but may not have enough cash available to meet co-op deposit restrictions. They also allow buyers to take advantage of the deductions associated with a larger loan. This gives buyers the ability to free up the money for other uses or pursue higher paying investments.

Is Negative Pledge Financing legal and ethical?

Absolutely. The IRS recognizes that Negative Pledge Financing is fully deductible debt as long as you can prove the funds were used for the purchase of a co-op apartment.

Cyan Offers Negative Pledge Financing for the purchase of a NYC Co-Op

Cyan offers some of the lowest rates available on Negative Pledge Loans and our interest only loans can make your payments 100% deductible.

If you wish to reduce the amount of your deposit on the purchase of a NYC Co-Op, contact an experienced Cyan mortgage specialist at 212-949-4363.

We’ll help you figure out whether a Negative Pledge Loan might be a smart way to say: “Welcome Home.”