Equity Coop
Description
John Restakis:
"Equity co-ops are similar to life lease co-ops with the difference that co-op members own the units they occupy. Shares in the equity co-op cover the development costs of the housing and once again, due to the exclusion of developer profits and sales commissions, the equity co-op can develop housing at below market cost.
In some equity co-op models, co-op members are required to take a second mortgage on their unit which is paid off at the time of resale. The proceeds from this second mortgage are allocated toward the construction costs of additional equity co-ops."