FHA influence on Rental Restriction limits

Started by TinoS • 1 replies • 1614 views

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TinoS (California)
Posts: 85

Posted:

I've heard that as the ratio of renters to owners living in an townhouse development gets higher than 25% the value of the property decreases because loan rates are less favorable at higher than a 25% ratio. but someone has just shown me a HUD document that says the limit is 50%.

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-46bml.pdf

Is this for new developments only? or does this negate that 25% number that I've been worried about? We have been thinking of amending our CC&Rs to create a rental restriction that sets a 25% limit. If the limit is actually 50% we might change our strategy. - BTW we are in California and the association is about 30 years old.

TishS (Washington)
Posts: 116

Posted:

The lending rules apply to old and new developements. It also will effect anyone trying to refinance, so I would contact a trusted mortgage broker in your area for advice.

Many cities have incentive programs for First Time Buyers that also have limitations on the number of renters in a qualified property.

Bottom line, renters do not add value unless you are trying to attract people who want rental properties and enjoy living in a community that has a regular turnover of residents.

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