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What to Look for in Buying a PUD Part (2)

Financing to purchase a PUD is the same as financing a singlefamily home, since you own both the dwelling and the land. However, you have to factor the HOA fees into your qualifying ratios. Addition ally, you may run into problems if the percentage of rentals in the complex is large or if the complex is new and you’re one of the first buyers.

Because FHA, VA, and conventional financing rules frequently change, make any offer subject to receiving financing, even though you’re preapproved for a mortgage. The lender may look at the community and ask for a higher down payment or may even decline your deal if the ownership to rentals ratio changes or credit standards tighten.

Lastly, in a PUD, it’s important to stay active in HOA affairs and realize that changes in your community will happen as owners sell and new buyers move in with different ideas. You may find that you have to make a few adjustments as the community evolves. This can be a positive experience or a negative one depending on your outlook. For example, Loren and Dora found this out when they retired and downsized to a smaller home in an upscale PUD with a golf course.

It was a new development and they enjoyed making friends as more people their age moved in as well. Soon phase one of the complex sold out and the homeowner association assumed management of the community. The first four years were fun. Dora was active in the HOA, while Loren improved his golf swing.

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