Now that FHA loan denials have lessened, perhaps it is time to take a serious look at community CC&Rs. Buyers, sellers and property owners should look for, and know, the community provision that allows or violates FHA Free Assumability guidelines. Here are some examples:
Trilogy West at Vistancia pg 3 – Read #4. It exempts transfer or conveyance as a result of foreclosure.
Trilogy at Vistancia CCR’s – Read #6.17.4. It exempts transfer or conveyance as a result of foreclosure.
Vistancia Village A – Read the paragraph before Section 7.15. It does not exempt properties transferred or conveyed as a result of foreclosure.
These are three examples of community documents. Each named the fee a different name, what is important is that they also made clear who was exempt and who was not.
Remember, CC&Rs are amended frequently. One should always contact the homeowner’s association for the most current document before buying or selling a property. In addition to the Free Assumability issue, FHA also approves or disapproves fees under the PIF underwriting guidelines. Recently, FHA has begun approving PIF fees and at the same time granting the association acceptance for Free Assumability. This is an approval internal to FHA, so work closely with your lender.