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My mother owns a condo in NY that has an HOA. She received a notice (as did everyone) that they are going to
1) No approval of FHA mortgages
2) No approval of any rentals in the community
Is this legal? It is located in NY state.
I was under the impression that they can restrict the percentage of rentals but not to have any whatsoever?
Why would a buyer need board approval for any type of mortgage?
Her unit was purchased with cash many years ago so this wasn't an issue for her. She may want to sell within a year or two and this restricts the number of buyers. Can they really do this?:
Legal for sure. There are a number of hoops a condo development has to jump through in order to qualify for FHA. Some communities can't qualify or don't want to.
Are you certain it's not the condo Association that no longer has FHA approval and they (HOA) is now restricting rentals for that reason? No offense, it sounds like you or mom could have it backwards. The more types of financing available, the larger the pool of buyer, the higher the values.
If not, it could be they don't want to do any more lender questionnaires. Or, they don't want to meet the minimum reserve requirements, or have a reserve study done......
HOA's rarely pick up the tab for the approvals, nor do they have the brunt of the paperwork needed for the approvals.
Are you certain it's not the condo Association that no longer has FHA approval and they (HOA) is now restricting rentals for that reason? No offense, it sounds like you or mom could have it backwards. The more types of financing available, the larger the pool of buyer, the higher the values.
If not, it could be they don't want to do any more lender questionnaires. Or, they don't want to meet the minimum reserve requirements, or have a reserve study done......
HOA's rarely pick up the tab for the approvals, nor do they have the brunt of the paperwork needed for the approvals.
They did a reserve study in December 2014
I guess they let the FHA approval expire and the board decided "unanimously"that they did not want the complex to be FHA certified...
They think FHA loans are too closely tied to foreclosures and that everyone should qualify for a conventional loan.
This sounds like discrimination and it takes away 50% of the buyers.
Many of the board members are out of touch and seem to want to live in 1980 instead of the present.
For example- AT&T wanted to upgrade the area for faster internet and the board said no even though it would have cost the owners nothing (AT&T was paying for it).
Oh,man,sounds like some of the craziness of our last HOA, the only one of many we had lived in ( and the only one of many other HOAs other residents who lived there had been in) that was a bad one.
They did a reserve study in December 2014
I guess they let the FHA approval expire and the board decided "unanimously"that they did not want the complex to be FHA certified...
They think FHA loans are too closely tied to foreclosures and that everyone should qualify for a conventional loan.
This sounds like discrimination and it takes away 50% of the buyers.
Many of the board members are out of touch and seem to want to live in 1980 instead of the present.
For example- AT&T wanted to upgrade the area for faster internet and the board said no even though it would have cost the owners nothing (AT&T was paying for it).
Unless the location and complex are truly exemplary, they have slaughtered property values.
No certification. No conventional lending. Much smaller funding pool with more hoops and expense for buyers.
They are simply saying they are not on FHA approved list anymore. Many condos are falling off this list because meeting the new requirements is very time consuming and usually requires a good deal of money ie; help of a lawyer or mgmt company to complete. Though its more difficult, people can still get an FHA approved loan regardless of this. No, if you get a mortgage, the board has nothing to do with it.
They are not approving rentals, but legally they have no right to approve, nor disapprove what you do with the property that is in your name.
The biggest problem about renting your condos is the condo association thinking they need to track who rents. To fix this, condos simply need to assume every condo is owner occupied. Don't ask, don't tell. When the bank asks the association about rentals, the association can answer honestly "to the best of my knowledge all units are owner occupied" If the bank wants to know which units are rentals, they can simply send over a bank employee to knock on every door and ask them. Its not the condo associations job to do the bank's work.
There is absolutely NO reason your condo association should be tracking this information. It is NOT in their best interest.
Last edited by 399083453; 08-15-2015 at 09:01 AM..
They are simply saying they are not on FHA approved list anymore. Many condos are falling off this list because meeting the new requirements is very time consuming and usually requires a good deal of money ie; help of a lawyer or mgmt company to complete. Though its more difficult, people can still get an FHA approved loan regardless of this. No, if you get a mortgage, the board has nothing to do with it.
They are not approving rentals, but legally they have no right to approve, nor disapprove what you do with the property that is in your name.
The biggest problem about renting your condos is the condo association thinking they need to track who rents. To fix this, condos simply need to assume every condo is owner occupied. Don't ask, don't tell. When the bank asks the association about rentals, the association can answer honestly "to the best of my knowledge all units are owner occupied" If the bank wants to know which units are rentals, they can simply send over a bank employee to knock on every door and ask them. Its not the condo associations job to do the bank's work.
There is absolutely NO reason your condo association should be tracking this information. It is NOT in their best interest.
I disagree. The best thing about HOAs is that they usually require a background check for your renter. That way you know if they have a criminal past or other legal issues that can present a problem to the owner and neighbors. And they can tell you what you can do with your property, you sign and agree to it.
I disagree. The best thing about HOAs is that they usually require a background check for your renter. That way you know if they have a criminal past or other legal issues that can present a problem to the owner and neighbors.
False sense of security. A very sweet young woman can rent a place and her boyfriend or guest(s) could be the worst criminal in the city.
The association has nothing to do with the lease. Its a contract between a renter and the owner. Your also assuming the owner is being honest about who is living there. Or the owner could be a criminal and there is nothing you can do about that.
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