Real Estate Glossary > C > Cooperative Definition

A type of residence where the buyer owns shares in the corporation that owns the building and has the right to live in a specific unit, but doesn't actually own the space. The development's association board interviews the buyer as part of the application to live in the community. However, some banks won't finance loans for a co-op because the borrower only owns shares in the co-op, not the unit. If the lender ended up foreclosing on the borrower, they would only receive the shares in the co-op, not the actual property.