When you buy a house you can do anything you want with your property as long as you do not violate city, state or federal laws. When you buy a condo or townhouse, however, you buy into a Common Interest Community (CIC) and you must also abide by their laws… which may mean giving up some of your freedom. Minnesota state law mandates that a buyer has 10 days to review the rules, regulations, financial records and governing documents of a CIC before committing to the purchase. But there are also a few things to watch out for before you even consider buying into a particular complex.

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PHOTO: SHUTTERSTOCK

PET REGULATIONS

Some complexes allow pets, some do not. Those that do may have restrictions on types of pets (for instance they may allow cats but not dogs), may restrict how many pets, or have size, weight, breed restrictions. If you have a pet you must bring with you, or do not want to have a dog living in the unit next door to you be sure to check out complex pet restrictions before looking at properties.

IS THE COMPLEX FHA/DVA APPROVED?

If you plan  to use an FHA or DVA mortgage, the complex must be pre-approved for FHA or VA financing. Don't rely solely on the information in the property listing, which may or may not be accurate. Search the government databases below yourself for the most up-to-date information. (Separate approvals for FHA and VA, separate databases) It is possible that a complex was at one time approved for FHA/VA financing but they failed to renew the approval so it is no longer possible to purchase in that complex using FHA or VA financing.

CALCULATE ASSOCIATION FEES AS PART OF YOUR MAXIMUM MONTHLY PAYMENT

Your mortgage pre-approval typically includes a maximum monthly payment. When you buy a house, it includes mortgage principal and interest as well as taxes and insurance (PITI). When you buy into a CIC your maximum monthly payment must also include your association fees. Because of this you may qualify to purchase a house at a higher price than a condo or townhome. Some condo fees can be substantial, don't be disappointed by learning too late that the association fees put you over your maximum monthly payment.

ARE RENTALS ALLOWED? WHAT PERCENTAGE?

Rules change regularly so check with your lender for current requirements for your loan, but there is typically a maximum percentage of units that can be rented… and no rentals allowed can also be a red flag for DVA financing.

Be sure to check with your lender for condominium requirements early in the process.

Sharlene Hensrud, RE/MAX Results Minneapolis-St. Paul Condo Realtor

The HomesMSP Team - SharleneJohnAngela Minneapolis-St. Paul Realtors

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About Sharlene Hensrud

I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

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