April 8, 2020 at 9:06 am #66826
I’m wondering if this is going to be an issue. Im at bank app stage and they just asked builder for HOA. As of now the neighborhood is not done yet so they arent charging HOA at this time. I’m not sure when the neighborhood will be complete since there’s lots of houses that still need to be built. Will this be a problem?April 8, 2020 at 9:16 am #66827BakerTheBakerMember
If there’s no HOA, there’s no HOA. I don’t see why that would be an issue. Just like if property taxes changed, that would change after the loan is issued, so isn’t part of this process.April 8, 2020 at 9:20 am #66828NelsontMember
My guess is yes it will be an issue depending on the situation. If your piti is already close to your max then the HOA could potentially send you over the max which is not allowed. If you are say $200 below your piti chances are you would end up being fine in the long run…condos often have exorbitant monthly fees but, I can’t imagine most houses, especially in the under 500k range have HOA fees approaching anything like that. But you will probably need a number/tentative commitment to a number from the builder in order to continue. I just can’t imagine you would be able to move forward with the possibility however small it may be that your HOA would put you above your max approved piti. I wonder if they can use an estimate based on similar neighborhoods from the builder.April 8, 2020 at 9:22 am #66829
Thanks @BakertheBaker I just thought I rememebr reading somewhere that someone had a problem with this. Since there will be HOA in the future, but I’m hoping things go smoothly. It seems every other day conditions pop up but so far they have been easy to address. Hope things are still going good for you too!April 8, 2020 at 9:30 am #66830
NelsonT I do have a little under 200 in wiggle room so that’s good to know. The builder does have another neighborhood where they charge a small HOA fee of only $45. Depending on how my MC responds I will see if they can use that figure if there is a problem.April 8, 2020 at 9:46 am #66831NelsontMember
Yeah I think if there are no current plans to have a HOA fee and you end up getting one after you close that’s different from a community that has a HOA fee planned just no value yet. Basically naca, boa, all the underwriters and you yourself know without a doubt that your piti will be increasing in the future. The question is by how much.April 8, 2020 at 12:42 pm #66841TTrumbleMember
This looks like one of those rare “everybody’s right and everybody’s wrong” situations.
Here’s what it will boil down to. You have been told there will be an HOA fee in the future. In other words, someone verbally informed you that there are plans for a HOA fee of some undetermined amount at some undetermined point in the future. Literally, all talk.
The real question is where does it state IN WRITING that there will be HOA dues? If it’s not in the Purchase and Sale Contract or some other definitive document, then the HOA is nothing more than hot air and can’t be factored in. In that case, BakerTheBaker pretty much nailed it.
Think about it like this: You are in your intake session with your counselor and you say, “I’m probably going to have student loans in the future.” do you factor that in? Of course not. Right now they don’t exist, and any number of things might happen to change the likelihood of that debt becoming real or how much it might be.
On the other hand, if a statement that an HOA will be created is part of the P&S or other relevant document, then we will need to make an estimate of how much those dues might be and factor it in. If that’s the case get something in writing about the $45 dues at the other nearby neighborhood and we will most likely use that.
In either case, you should be okay since you state you have about $200 extra room in your affordability. What you need to do right now is find out if there is written confirmation that the HOA dues will exist, and a statement from the other neighborhood to use as a “comparable” if there is written confirmation. That will be the pivot point that this will turn on.
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