If you’re in the market to buy or sell a Condo, it is always good to get to know a little about the HOA. It has been becoming a bit harder to get loans approved for condos of late due to condition of the complexes becoming an area where insurance companies are more concerned than they used to be, but now we’re getting into new territory with new guidelines coming into effect. Let’s listen to one of my most trusted resources explain a little;
“The Homeowner’s Association (HOA) has always been a key element when buying a condominium. Now, that’s going to a whole new level. Updates to underwriting requirements will make things less restrictive for some smaller complexes but overall the changes are putting much more emphasis on the ‘health’ of the HOA.
The HOA will have to provide detailed projections of maintenance requirements and the association’s budget to show the funds will be there when needed. This is called a reserve study and looks at timing for when the roof will need replaced or siding and decks may need updated. Health and Safety issues are the key elements. The HOA must then show it has adequate reserves and revenue to cover pay for everything in the future.
Additional changes are also underway for insurance requirements. These changes will require many HOA’s to take a more proactive approach to ensure the community will qualify for conventional financing. This is a huge element to ensure marketability.” Gary Boyer, Certified Mortgage Planner, Premier Mortgage Resources
If you’d like to learn a little more, here is a piece from the National Association of Realtors with more details: CLICK HERE