Before making an offer on a Santa Clarita home that is within a Homeowners Association (HOA), there are a few things you should find out about the HOA's "health" so to speak, especially if you are financing your home with less than 20% down and will be occupying the residence.
Each lenders' guidelines are different, so check with yours…but often times if you are putting less than 20% down and will occupy the home, and or you are an investor who is financing the home, despite putting 20% down, or more….your lender will probably scrutinize and investigate the condo or homes HOA for several items.
Those items "tend" to be:
- Any litigation/lawsuits the HOA is involved in
- Current non-occupied owner ratio (ie. how many are rentals)
- Percentage of units or homes that have a delinquent HOA dues balance
Unfortunately, a lot of this information is not learned until the 2nd or 3rd week of escrow, once your lender receives a report back from the HOA. Sometimes the HOA's are backed up on these sorts of information requests, and they don't get them back to your lender in a timely fashion. Sometimes they are just lazy or understaffed too.
By the time your lender receives this information back from the HOA, it's very likely you have already spent about $300-500 on the physical home inspection, and about $400-$500 on the appraisal your lender had you pay upfront for. Now, wouldn't it be a pity to find out, from your lender, that once they reviewed the HOA's certification, they subsequently determined that lending on that community, with your type of loan is not an option!? That would be shitty horrible! Why? Well because of that money, time, and emotion already invested into making the transaction work.
While not all details are able to be learned upfront, prior to opening up an escrow…do your best, have your agent and lender do their best, to investigate some of the key questions that need to be answered about the HOA. This way you may be able to save a lot of money, by not entering into a real estate transaction in Santa Clarita that is doomed to fail.
Check out our SCV Real Estate 360 video that Brian put together on this subject…enjoy!
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