Housing cooperatives, more commonly known as co-ops, are resident owned-and-operated apartment complexes, usually managed through a non-profit cooperative housing corporation, or CHC. If you buy into a co-op, you are actually buying shares of the CHC and not acquiring any piece of the property directly, as you would if buying a condominium.

Instead, the CHC holds title to the property. Likewise, you would obtain a share-loan from a lender rather than a mortgage. As a shareholder in a CHC, you would then be entitled to live in a particular unit of the building or complex, with all your rights outlined in an occupancy or lease agreement. Your monthly fees, similar to homeowner’s association dues, would reflect your portion of the CHC’s operating costs.

What are the benefits of buying into a cooperative? As with other types of homeownership, co-op membership entitles the shareholder to a deduction for property taxes and mortgage interest paid by the CHC. In addition, co-op buildings often receive lower property tax assessments. Resident control of the apartment complex is another appealing feature. Unlike renters, co-op residents run their own facilities and do not face the threat of arbitrary rent hikes. In fact, shareholders have the right to vote on all decisions of the CHC. Best of all, co-ops are usually more affordable than condominiums and, unless the co-op is a limited-equity, the investment could yield a substantial return, as with any other type of property investment. On the other hand, limited-equity co-ops can offer homeownership access to people who might otherwise not be able to purchase housing at the market rate.

Visit the Web site of The National Association of Housing Cooperatives (NAHC) for more information.