In general, lenders aren’t concerned with how many people are renting out homes in communities that are made up of single-family houses, a story from The Washington Post reported. Whether the community has 100 homes or 1,000 homes, it doesn’t matter if one or all of them are rented when it comes time to get financing.
However, if a community of single-family homes is more like a condominium association, where assessments are integral to the community, there could be an issue with future buyers obtaining financing. In a community that is considered to be “maintenance-free,” where a single-family homeowners association is responsible for the repair and maintenance of the homes (the exterior siding, windows, doors, roof and landscaping), the issue of the payment of monthly assessments becomes a bigger deal.
“Generally speaking, there’s always going to be a slightly negative impact on value the more an area is non owner-occupied. It’s not significant,” Dick Lepre, a senior loan adviser with RPM Mortgage Inc., told The Washington Post. “But it might show up in the appraisal report, if the rental properties sell for much lower prices than other homes in the neighborhood. Or if the appraiser notices that the neighborhood rental properties are in awful shape.”
Lenders are concerned that if more than half of all condo units are rented, buyers would have a tough time finding financing, Lepre said.
“If you’re buying in a mixed-use property, you’ll have a hard time finding conventional financing if the retail space exceeds 25 percent of the total space of the property, including gross living area of the residential units plus the commercial,” Lepre said.