Condos have discovered borrowing for capital improvements.

The 59 West 12th Street condominium, one of the many architectural treasures of Greenwich Village, faced a problem common to many buildings in New York City. Substantial work had to be done on the structure's facade. And the repair could not be put off any longer, since building facades must pass periodic city safety inspections.

What was not so common was the manner in which the condominium chose to pay for this work.

Initially 59 West 12th Street looked to do what condos are accustomed to doing when confronting a major capital improvement - impose a special assessment on apartment owners. As usual in such instances, the condo needed to collect the money from residents quickly and had to levy the assessment over an 18-month period. It soon became clear, though, that some owners in the 100-unit build- I ing found it inconvenient to pay such a large sum in so brief a time.

"Although the condo's apartments may sell for many thousands of dollars, not everyone can immediately write a check for their share of a $2 million assessment," observes Lawrence Wieser, CFO of Goodstein Management Inc., the building's management company.

So 59 West 12th Street took advantage of a new option available to New York condos within the last three years - borrowing money. With a 10-year. $1.9 million line of credit from National Cooperative Bank (NCB), the condo was able to pay on schedule for the work to be done while offering unit owners the opportunity to stretch out the amount of time they take to pay back their share of the loan.

Sentiment was strong in the building that the cost to bear the loan should fall on those who chose to extend their payment period. Hence, the condo board gave unit owners three loan payment choices. If owners paid their share all at once in cash, they would receive a modest discount. If they chose to pay over 18 months, they would not be assessed any interest charges. And if they preferred to spread their payments over 10 years, they could do so and dramatically reduce their monthly fees.

Until the New York Condominium Act was amended in 1997, condos were precluded from borrowing. Even though their buildings had to be maintained and improved, condo associations were forced either to impose hefty special assessments or put off expensive repairs until they had accumulated enough funds from common charges to pay for the work.

Now the law has been changed, allowing a condo association to borrow funds by making a promise to pay based on the cash flow coming from the common charges or assessments. The effect is to give condos a way to finance capital improvements without asking the unit owners to supply a huge amount of money all at once.

Christadora House, an 85-unit historic high-rise on Manhattan's Lower East Side, is another condominium that has come to understand the appeal of borrowing. The board needed to finance part of a $1.5 million exterior repair restoration on its 73-year-old landmark building, originally built as an immigrant settlement house and converted into a condo in 1983.

All of the condominium's facade, including terraces, parapets and ornamentation, required attention in order to make the building's envelope more watertight.

Christadora House approached NCB and obtained a S1 million line of credit. "The condo's management examined the various alternatives and decided this would be a good way to go," says Tom A. Milstein, senior property manager of Andrews Building Corporation. "The loan doesn't cover the entire capital project but enough of it so that the assessment doesn't have to be quite as onerous."

Although it took handholding to overcome the reluctance of some condo unit owners to take on building debt, the advantages soon became obvious. In fact, Milstein adds, by obtaining the financing, Christadora has been able to consider addressing additional building needs that would otherwise have to be deferred.

Nothing is final yet, but the condo is mulling over a possible window replacement program. And then there is that large neglected swimming pool in the basement. Who knows, maybe that could be brought back to life.