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NCB Announces Success of New Tenant-In-Common Financing Program for Properties in California


Washington, DC (February 26, 2008)
— NCB, a nation-wide bank specializing in co-op, condo and single-family home loans, is proud to announce the initial success of its new Tenancy-In-Common (TIC) financing program for California properties. Tenancy-In-Common refers to any arrangement under which two or more people co-own a parcel of real estate without “right of survivorship.” The new NCB loan program is one the latest initiatives by the Bank to provide its customers with the best, and most complete suite of banking options.

“NCB will focus its efforts to meet the growing borrowing demands of this type of property ownership,” stated Jeremy Morgan, Vice President and Senior Loan Officer of NCB’s National Residential Real Estate Group. “At NCB we are constantly focused on developing our line of business to match the needs of the residential housing communities we serve. While TICs are unique, they share many of the cooperative ownership principles NCB understands well, such as democratic member control and member economic participation.   The Bank was chartered to provide cooperative financing, and is the leading financial institution nationwide of innovative borrowing options for cooperative shareholders, so for us, TIC loans are a natural fit.”

Currently, there are 3,000 TICs in California, representing 10,000 residential units.  Owners are responsible for their own financing, and each loan involves a note signed only by the owner of a particular TIC interest, secured by a deed of trust covering only that owner’s TIC share.   This is different from a cooperative, where shareholders purchase shares of stock in the corporation that owns the building, and a condominium where each unit is separately deeded and recorded.

NCB offers customers who are interested in purchasing a TIC unit adjustable rate mortgages (ARMS) for one-, three-, five-, and seven-year terms for conventional and jumbo loans, as well as interest-only financing and a 10-year Jumbo ARM.  Requirements for loan applicants include: a minimum of 75 percent owner occupancy; a credit score over 680; maximum combined loan-to-value ratio of 75 percent for owner-occupied units and a maximum debt-to-income ratio of 45 percent.

While TIC properties share a similar structure to cooperatives, they are securitized by a fractional interest, not a stock certificate like cooperatives. Therefore, NCB’s TIC financing are considered fractional loans, and are secured only by the co-owner’s percentage share in the property. 

“As the price of real estate increases and communities adopt stricter growth and condominium conversion restrictions, more and more people are turning to tenancies in common and other non-traditional co-ownership structures as a way to maximize their buying and selling power,” stated Andy Sirkin, a Partner in the law firm Sirkin Paul Associates, which specializes in all areas of TIC development and management.

NCB has originated loans for a number of TIC properties up and down the California coast, including TICs located in Santa Monica, Burlingame, San Francisco and Los Angeles.  The average sale price to date is $547,000 with an average loan amount of $372,000.

“We are excited to offer this lending option. The introduction of TIC loans is one of the many current NCB programs that strengthen communities nationwide through its customer-centric banking products and financial services, while promoting NCB’s core values of creating affordable homeownership across the country,” added Mr. Morgan.  

For more information about NCB’s TIC program, contact Jeremy Morgan at (937) 840-2425, via email at jmorgan@ncb.coop, or on his website at www.ncb.coop/jmorgan.

NCB Financial Group (NCB) consists of National Consumer Cooperative Bank, a wholesale funding company; NCB, FSB, a federally-charted savings bank; and, NCB Capital Impact, a 501(c)3 nonprofit.  Loans and other financial services are provided by NCB, FSB and NCB Capital Impact.   Deposit products and services are provided by NCB, FSB, which is a member FDIC.   Each is a separate corporation within the NCB Financial Group.