Confused about the difference between a condo and a co-op in Cambridge? You are not alone. The choice affects how you own, how you finance, what you can do with the home, and what you pay each month. In this guide, you will learn how condos and co-ops work, how they show up in Cambridge neighborhoods, and what to review before you make an offer. Let’s dive in.
What you own: condo vs. co-op
When you buy a condo, you own your individual unit in fee simple and an undivided interest in the building’s common areas. Your deed is recorded at the Registry of Deeds, and you pay your own property tax and mortgage.
When you buy a co-op, you purchase shares in a corporation that owns the building. Those shares give you a proprietary lease or occupancy agreement for your unit. Title to the real estate stays with the corporation, and you must be accepted by the co-op board before closing.
In practice, this means condo sales transfer by deed while co-op sales transfer by share certificate and lease. It also means condo owners handle property taxes directly, while co-op shareholders typically pay a monthly maintenance fee that includes their share of the building’s taxes and operating costs.
How this affects daily life
Rules and control differ. Condo associations have bylaws and house rules, but they generally do not approve individual buyers for resales. Co-op boards usually have stronger screening powers, set detailed house rules, and can restrict subletting or other policies within fair housing laws.
Monthly costs flow differently. Condo fees usually cover common-area expenses and reserves. Co-op maintenance often includes building-level property tax and, if present, payments on an underlying mortgage. Co-op maintenance can look higher, but you need to compare the full picture: condo mortgage plus taxes and HOA fee versus co-op share loan plus maintenance.
Financing and underwriting in Cambridge
Condo buyers typically use a conventional mortgage secured by the unit. Lenders underwrite you and the condo project, reviewing items like the budget, reserves, owner-occupancy, delinquencies, and any litigation.
Co-op buyers usually use a share loan. Lenders underwrite you and the co-op corporation, looking at financial statements, reserve levels, delinquency rates, the presence of any building-level mortgage, and board policies. Co-ops often require larger down payments or higher minimum equity. Requirements vary by lender and board.
Government-backed programs treat condos and co-ops differently. Condos may be eligible for FHA or VA financing if the project meets agency criteria. Co-op eligibility is more limited and depends on program approvals. If you plan to use these products, confirm whether a specific Cambridge building qualifies.
What lenders and buyers should examine closely:
- Building financial statements, budgets, and reserves
- Delinquency rates and any special assessments
- Any underlying co-op building mortgage and its terms
- Owner-occupancy and investor ratios
- Any pending litigation that could affect financing
Approval and purchase timeline
For a condo, you typically get pre-approval, make an offer, and review condo documents such as the master deed, bylaws, budget, reserve study if available, meeting minutes, and insurance. You will also want an estoppel letter that confirms fees, assessments, and owner standing.
For a co-op, you will secure pre-approval for a share loan and then complete a board application. Expect to provide detailed financials, references, and to attend a board interview. The board votes on your application before closing. Co-ops may require minimum post-closing liquidity or limit renting based on the bylaws and house rules.
Resale rules also differ. Condo associations generally cannot block a sale in the way a co-op board can, though they enforce bylaws and collect required documents and fees. Co-ops can have more detailed transfer procedures, and limited-equity or nonprofit co-ops use resale price restrictions to preserve affordability.
Fees and reserves: what to look for
Condo HOA fees cover common-area maintenance, building insurance for common elements, management, shared utilities, and reserves. You still pay your mortgage and property tax directly.
Co-op maintenance covers operating costs and building insurance, and it usually includes the building’s property tax. If the co-op has an underlying mortgage, maintenance includes debt service. Compare apples to apples by looking at your full monthly housing cost for each option.
Special assessments are possible in both structures, usually for capital projects or unexpected expenses. A well-funded reserve reduces the chance of large assessments. In Cambridge, older masonry and historic buildings often face higher capital needs such as façade work, roof replacement, or window projects. Newer buildings may focus more on warranties and system performance.
Where you will find each in Cambridge
You will see more condos in newer construction and large redevelopment areas like Kendall Square, East Cambridge, and North Point. Many buildings near major employment centers and transit were developed as condominiums or rentals marketed to individual buyers.
In neighborhoods with older housing stock, such as Harvard Square, Cambridgeport, Mid-Cambridge, and West Cambridge, many multi-family homes and walk-ups have been converted to condos. Some older buildings in these areas are co-ops or remained rental properties.
Cambridge also includes limited-equity or nonprofit co-ops and community housing cooperatives. These offer affordable ownership opportunities with resale restrictions that keep units within reach of income-qualified buyers. Approval, financing, and resale processes in these co-ops follow rules designed to preserve long-term affordability.
Which option fits your goals
Consider a condo if you want:
- More flexibility for future renting within HOA and municipal rules
- A more standardized mortgage process and typically quicker resale timeline
- Ownership recorded by deed and direct control over property tax payments
Consider a co-op if you are comfortable with:
- A board approval process with detailed financial disclosure
- Potentially higher monthly maintenance that includes taxes and possibly building debt
- More community oversight and rules that can promote consistent building standards
Neither is automatically better. Your best fit depends on your financing plan, timeline, comfort with rules, and long-term goals for renting or resale.
Buyer due-diligence checklist for Cambridge
Before you tour or write an offer, gather and review:
- Financials: 2 to 3 years of association or co-op financial statements, current budget, any reserve study, and a list of special assessments over the past 5 years
- Governance and rules: master deed or condo declaration, bylaws, proprietary lease for co-ops, house rules, and pet and sublet policies
- Minutes: board or association meeting minutes for the last 12 to 24 months to spot upcoming projects, disputes, or litigation
- Insurance: a copy of the master insurance policy and clarity on what your personal policy must cover
- Litigation: disclosure of any pending or threatened suits involving the building or association
- Building condition: recent capital projects, façade and roof history, mechanical systems, elevator status, and any open code violations
- Occupancy: owner-occupancy and investor ratios that could affect financing eligibility
- Assessments: any upcoming or repeated special assessments and the plan to fund capital work
- Financing: whether your lender works with Cambridge condos and co-ops and will accept the building
- Local checks: property tax status, open permits, and code items through city channels, plus a title search at the appropriate registry
Smart first steps
- Get pre-approved with a lender experienced in both condo and co-op loans if you are considering both paths.
- Ask for a complete condo or co-op document package early. Read the budget, reserves, and minutes closely before you finalize your offer.
- Work with a Massachusetts real estate attorney who understands condo law and co-op share transactions.
- If you are weighing tax implications, consult a CPA familiar with co-op shareholder statements and condo deductions.
- Use inspectors who know Cambridge’s older masonry and historic buildings as well as newer construction systems.
Work with a local guide
Buying in Cambridge requires a clear plan, careful document review, and the right team. You deserve steady advice, strong advocacy, and a process that feels organized from first tour to closing. If you want a calm, knowledgeable partner to help you compare neighborhoods, evaluate buildings, and negotiate with confidence, reach out to The Boston Home Team.
FAQs
What is the core legal difference between a condo and a co-op in Cambridge?
- A condo gives you deeded ownership of your unit plus a share of common areas, while a co-op gives you shares in a corporation and a proprietary lease for your unit.
How do monthly costs differ between condos and co-ops in Cambridge?
- Condo fees cover common expenses while you pay taxes and mortgage separately; co-op maintenance usually includes building taxes and may include debt service on a building mortgage.
Is it easier to get a mortgage for a condo or a co-op in Cambridge?
- Condos typically have more standardized mortgage options; co-op share loans exist but underwriting is often stricter and the process can take longer due to board approval.
Can I rent out my place later if I buy a condo or a co-op in Cambridge?
- Condos often allow renting subject to HOA and local rules; co-ops commonly have tighter sublet policies and may limit renting based on board-approved rules.
What documents should I review before making a condo or co-op offer in Cambridge?
- Review governing documents, budgets and reserves, meeting minutes, master insurance, any litigation disclosures, and for co-ops, the proprietary lease, house rules, and any building-level mortgage details.
Will a co-op board in Cambridge interview me and can they deny my application?
- Most co-op boards require an application and interview and can deny for financial or other lawful reasons; thorough preparation and transparent documentation help reduce risk.
