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Homeowners associations (HOA) are legal corporations formed by a real estate developer to market, manage, and to sell homes and lots in a residential subdivision.
They’re most commonly formed for condominiums and planned urban developments (PUDs), a category that includes suburban communities.
HOA Articles of Incorporation typically grant developers privileged voting rights in governing the association during its infancy, while providing the means for the developer to exit financial and legal responsibility for the organization, transferring ownership to the homeowners of the association.
This transfer typically occurs after a predetermined number of units have been sold — often two-thirds of the available lots and/or units.
Each homeowners association enforces its own governing documents in the form of restrictive covenants, by-laws, architectural guidelines, and regulations. Together, the “rules” of an HOA are meant to define the community standards for the purpose of protecting property values. All owners are required to abide by these regulations. Otherwise, they could be faced with fines.
Restrictive covenants vary widely from homeowners association to homeowners association. Covenants may include guidelines on issues as varied as where parking is permissible; planned architectural improvements; and, landscaping.
HOAs in Seattle often enforce these common restrictive covenants, among others :
For homes governed by an HOA, membership in the homeowners association is a condition of purchase; buyers are not permitted to opt-out.
Homeowners associations make their by-laws available upon request to existing, governed homeowners and will often make by-laws available to prospective home buyers as well. Review community guidelines before buying into a building or neighborhood, and before beginning a home improvement project. It’s important to know what actions are permissible and what actions are not.
In addition, most mortgage lenders require HOA by-laws as part of the mortgage approval process.
If buying a condo is on your radar sometime soon, then you need to team up with the experts in mortgages, and Sammamish Mortgage is ready to step in to help. We have been helping home buyers across Washington, Colorado, Idaho, and Oregon obtains the mortgages they need since 1992. We offer a variety of mortgage programs with flexible qualification criteria. Please contact us today to get started!
Condominium owners and buyers have previously been at a disadvantage when trying to use the Federal Housing Authority (FHA) support to get a home mortgage. Single-family homes could get better FHA mortgage deals than condominiums. In October 2019, this changes.
Seattle is a unique city that attracts condominium dwellers. Although there is no shortage of both pros and cons regarding condo living, those committed to condo living have a complex approval process to navigate. Getting an early start on loan approval is crucial to getting the best condo for your family.