What Is a Sponsor Unit in NYC Real Estate? Here’s Everything You Need To Know

By: ROS Team

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If you’re looking to buy a home in New York City, you’ve probably heard of co-ops and condos. But what about sponsor units? The concept is similar but slightly different from both—let’s dive in!

What is a Sponsor Unit?

Sponsor units are not common in New York City real estate. A sponsor unit is a co-op unit that belongs to the sponsor, the building’s developer. A buyer who wants to reside in the building but does not want to own an apartment held by someone else directly might purchase the sponsor unit (direct ownership).

The benefits of buying into a sponsor property include lower prices than those of direct ownership units, better amenities, and faster closing times than other types of coops due to their streamlined processes for purchasing real estate through sponsorships.

what is a sponsor unit
Photo Credit: Canva


How to Buy a Sponsor Unit?

If you’re new to real estate and want to buy a sponsor unit, it can be confusing. A sponsor unit is just like any other property except that it’s sold through an exclusive network of brokers who only represent buyers looking for this type of home.

If you want to buy a sponsor unit in NYC, there are two main steps: finding a sponsor (the person who owns the apartment) and going through their broker’s office as your representative.

Once you’ve found someone willing to sell their home through this process. They will need to approve your application before moving forward with negotiations on price and terms. Then, once all parties are satisfied with everything from both sides’ perspectives–including legal fees. You’ll move into finalizing contracts with both brokers involved in order for them both to get paid by their respective clients (yourself included).

Can You Rent Out a Sponsor Unit in NYC?

Yes, it is possible to rent a sponsor unit for a maximum of two years, but certain limitations dictate the duration and cost of doing so.

Upon gaining approval for the program, the sponsor unit can only be rented for a period that does not exceed half of the time that it is accessible for use by eligible inhabitants such as family members or children and grandchildren.

If you choose to surpass this limit or if the building has less than five units. Your eligibility for sponsor units in NYC may be revoked in its entirety.

Can You Rent Out a Sponsor Unit in NYC
Photo Credit: Canva


Pros of a Sponsor Unit

  • You can buy a unit without paying the full price upfront.
  • You can rent out your unit to help pay for your mortgage.
  • You may be able to live in a sponsor unit while you save up for a down payment on a regular apartment.
  • You get more space than a regular apartment, which is great if you have kids or want more room for entertaining guests!

Cons of a Sponsor Unit

  • You can’t sell the unit: If you want to sell your sponsor unit, you’ll have to find another buyer who will be willing to take on both sides of the contract with your building’s sponsor. This can be difficult and time-consuming, as well as expensive (for example, if they are asking for a higher price).
  • You can’t rent out the unit: As long as you live in your sponsor unit and pay rent at market rate prices–which is required by law. You cannot rent out any other apartments in your building or sublet them temporarily while away on vacation or business trips. If you break this rule, not only will it hurt your chances of getting future mortgages. But also risk eviction from all units owned by owners who follow strict covenants about no sublets allowed!

Where can you Find a Sponsor Unit?

If you’re looking for a sponsor unit, there are several places you can find them. You can start by searching the MLS (Multiple Listing Service) or another real estate website. You can also look in the classifieds section of your local paper or magazine. As well as on social media networks like Facebook and Twitter.

If you don’t have much luck finding what you’re looking for on these sites. Try reaching out directly to agents who specialize in sponsor units. They may know someone who has one available that isn’t listed anywhere else!

Where can you Find a Sponsor Unit
Photo Credit: Canva


How Do Sponsor Units Compare to Co-ops & Condos?

Sponsor units are not as common as co-ops and condos. They’re also not as large, not nearly as luxurious, and often have fewer amenities than their counterparts in the condo market.

But there are some significant differences between sponsor units and other types of real estate that make them attractive options for first-time buyers who want to live in a desirable neighborhood without breaking the bank.

For example, sponsor units usually offer lower monthly maintenance fees than co-ops or condos do (partly because they don’t come with any shareholder responsibilities). And while prices tend to be higher than those at other city housing types–with one-bedroom units going for around $400K on average. They’re still much more affordable than purchasing an entire building unit would be!

How do Sponsor Units work?

A sponsor purchases a home, which they subsequently rent to renters. The loan they took out to purchase the home will subsequently be repaid by the sponsor using mortgage payments on the property. In place of having to rent an apartment themselves, the sponsor is then able to make money from renting out their home.


We hope you enjoyed learning about sponsor units and the benefits they can offer. If you have any questions, please feel free to reach out!