Down payments, closing costs and cash reserves for co-ops and condos.

A $2 million apartment with 20% down starts with a $400,000 down payment. That is only part of the budget.

To buy an apartment in NYC, you need enough money to fund the purchase, pay the transaction expenses and meet any requirements for assets left after closing. Moving costs, planned work and your own financial cushion belong in the calculation, too.

The distinction matters most when comparing co-ops and condos. A co-op can cost less to close while requiring more assets afterward. Those reserves remain yours; they are not an additional fee paid to the building.

Start with three numbers

Your purchase budget = funds needed for the transaction + assets to retain afterward + money set aside for moving and planned work.

The first amount must be available when payments are due. The second may include investments that qualify under the building’s and lender’s rules. You do not necessarily need the entire total sitting in a checking account.

1. The down payment

Many NYC co-ops require at least 20% down, and some require substantially more. A condo’s financing options may allow a smaller down payment, but the loan, borrower and property still have to qualify. Confirm the actual requirements before treating 20% as your budget. [1]

2. Closing costs and other closing funds

Add the applicable taxes, legal and lender charges, building fees and, for a condo, title-related costs. Prepaid interest, escrows and refundable deposits can also require cash, even though not all of them are permanent expenses. Our NYC buyer closing costs guide explains the individual charges.

3. Assets remaining after closing

A co-op board may measure reserves in months of housing expenses; the lender may apply a separate test. Ask both what counts. Where the same assets satisfy both tests, you do not simply add the two requirements together. Also decide whether that remaining cushion is enough for your own needs. [2]

NYC purchase examples: $1.5 million and $2 million

These hypothetical resale purchases show how to build a budget. They are not quotes, market averages or approval thresholds. Both property types use a 20% down payment. The co-op examples assume 24 months of reserves; the condo examples assume a lender requires six months. Actual requirements can be lower or higher. These assumptions do not establish which property type is more affordable for you.

Each pair uses the same illustrative monthly housing expense, including loan payments and applicable maintenance, common charges, property taxes and insurance. Replace it with the property’s actual costs and your loan quote. Other closing funds are assumed at $15,000 for the co-op and $25,000 for the condo, including fees, prepaids and escrows; condo title costs are included. No points, sponsor charges, buyer-paid brokerage fee, renovation budget or rebate are included.

$1.5 million purchase · assumed housing expense: $10,000/month

$2 million purchase · assumed housing expense: $13,000/month

What changes at $3 million?

A larger down payment in dollars is only part of the increase. The mansion-tax rate also changes at this price, and a larger loan increases the mortgage recording tax on a financed condo. [3][4]

$3 million purchase · assumed housing expense: $19,000/month

All three comparisons are before any commission return and before moving, planned work or any extra personal cushion. They count the full down payment, including any contract deposit paid earlier. They do not represent the amount of your final closing wire.

The examples use mansion-tax rates of 1%, 1.25% and 1.5%, respectively, applied to the full purchase price. Condo mortgage recording tax is modeled at approximately 1.925% of the loan, assuming an ordinary institutional lender and no purchase CEMA or other tax adjustment. Your attorney and lender should confirm the transaction-specific figures. [3][4]

Why the co-op total can be higher

In the $2 million example, the co-op requires $440,000 to fund the purchase, compared with $480,800 for the condo. Yet the co-op’s larger assumed reserve requirement takes the total funds and qualifying assets to $752,000, versus $558,800 for the condo.

That does not make the co-op $193,200 more expensive. Much of the difference is money the buyer still owns after closing. It does mean that the co-op requires a stronger liquid balance sheet under these assumptions.

Change the reserve requirement and the comparison changes. If that co-op required 12 months instead of 24, its illustrated total would fall by $156,000. This is why building-specific information matters more than a citywide rule of thumb.

Is a larger down payment always better?

More money down reduces the loan, but also uses assets you might need to retain. On a $2 million purchase, moving from 20% to 30% down uses another $200,000. The lower mortgage payment may reduce the reserve requirement, but you need to recalculate both sides before deciding. A proposal that satisfies the building’s financing limit may still leave too little liquidity.

What counts toward post-closing liquidity?

Ask for the building’s financial guidelines and your lender’s asset requirements early. Their definitions may differ. A strong net worth does not mean every asset is available for this purchase.

Cash, stocks and retirement accounts

Cash and accessible bank balances are the simplest starting point. Publicly traded investments may count toward reserves, but confirm how they will be valued and whether any discount applies. Money needed for the purchase itself must be available by the payment deadline; funds kept as qualifying reserves may not need to be sold. [2]

Retirement accounts need particular care. Some lending rules permit eligible vested retirement funds as reserves, while a co-op may treat those funds differently or exclude them. Do not assume an IRA or 401(k) counts at its full statement balance. Ask about access restrictions, documentation and valuation. [2][5]

Gifts and proceeds from another sale

Family help may be possible, but confirm the building’s policy and your lender’s requirements before relying on it. Eligible gift funds generally need documentation of the donor, transfer and absence of a repayment obligation. A loan from a family member is different from a gift. [6]

If you need proceeds from selling another home or investments, map out when those funds will be available. Allow for any taxes and transaction expenses that reduce what you retain. Money arriving after your payment deadline cannot fund that payment.

Do you pay the contract deposit on top of the down payment?

A contract deposit generally forms part of the purchase price you fund; it is not a second down payment. For example, if your total down payment is $400,000 and you have already paid a $200,000 contract deposit, the remaining down-payment balance is $200,000, before closing expenses and adjustments. Confirm the deposit amount and timing with your attorney. [7]

Can a commission rebate reduce what you need?

BRN returns half of the buyer-agent commission it receives, up to 1.5% of the purchase price, at closing. On the three example purchases, the maximum potential return is $22,500, $30,000 and $45,000. The actual amount depends on the commission BRN receives.

A return can improve your purchase economics. Its treatment must be coordinated with your lender and attorney, including how it is disclosed and delivered. Do not subtract an anticipated rebate from the money needed for your contract deposit or assume it satisfies a reserve requirement. That is why the examples above show the budget before any return. [8]

Before you make an offer, check these five things

The building: What down payment and post-closing liquidity does it require, and which assets count?

The financing: What loan amount, monthly payment and reserves has your lender actually evaluated?

The transaction: Have you budgeted for taxes, fees, prepaids, deposits and any buyer-paid brokerage obligation?

The timing: What must be available at contract signing, at closing and afterward?

Your own plans: What remains after moving, immediate work and the personal cushion you want to preserve?

Having enough cash is one part of being ready. Income, existing debts, credit and the building’s own condition and finances also matter. Organizing your assets and liabilities in a REBNY financial statement can help make the discussion more concrete.

Once the budget works, our guide to making an offer on a NYC apartment explains how to connect your financial position with price, terms and negotiation.