Options for Owning a Part of the Valley of the Sun

by Jan Green


Arizona is a beautiful place to live and work, but it’s also a great place to visit. Arizona is a top winter destination for many who live in cooler climates, like our northern friends. Arizona is also a great summer destination thanks to lower prices for hotels, golf courses and other tourist attractions.

Several new attractions have opened recently. The OdySea Aquarium, Butterfly Wonderland and Top Golf, to name a few. But it might be difficult to tell the difference between tourists and locals as we’re all in shorts and T-shirts enjoying Spring Training baseball and the many events around town.

During the summertime, our hotel rates are very affordable. Golf courses reduce their rates and tee times are a little easier to schedule. Indoor activities are many in most areas of the city. Restaurants are less crowded, too.

Repeat visitors coming to Arizona often purchase homes here after experiencing our great weather and attractions. Some of them are for winter use only while others rent out their homes until they retire and can spend more time in the Valley of the Sun.

An easy way to experience our city and have your own home is to purchase a condo. New construction in multifamily units has skyrocketed recently. There are 17-plus new projects in Scottsdale either just completed or under construction and at least 30 new projects in Phoenix. These are new patio homes, townhomes and apartment-style condos for sale. There are even more apartment multifamily complexes for lease.

All of these styles are an easy lock-and-leave situation for our “snowbirds.” There is typically no outside maintenance, unless a townhome comes with an exterior patio. The monthly HOA fee covers the exterior of the buildings and roofs (for most of these condos, townhomes and patio homes), plus the common areas — which oftentimes includes swimming pools — are maintained. So how do you purchase one of these-lock-and-leave-type homes?

Financing new construction typically involves on-site lenders, with some of them offering incentives to use the builder’s lender. Since the project is entirely new, comparable homes are readily available to satisfy a lender’s appraiser. Resale condo financing, however, is an entirely different discussion.

Financing resale condos has been a bit trickier, as the complexes have to meet lending guidelines. Guidelines are owner occupant ratios, financial reserve requirements and more.

Occupancy ratios have been the biggest hurdle since the housing crisis. Since 2010, a large portion of condos went into foreclosure. Prices were reduced, making these an attractive option for investors who purchased the condos and rented the units to tenants, thus lowering the owner/occupant ratios. With lower occupant ratios, the number of FHA-approved complexes fell to a short list. To see the list of FHA approved condos, visit HUD.gov.

Condos that don’t meet those guidelines have been removed from the FHA approved list and have become what we call “non-warrantable.” There are lenders who specialize in financing these “non-warrantable” condos, so financing may still be available for some. And one lender I know of is working to add complexes to that list.

This year, FHA guidelines will loosen, reducing the owner-occupant ratios and thus allowing more borrowers to purchase condos. If you’re interested in purchasing a home or condo, I can help you, but for information about financing, speak to a lender about your particular situation and for answers to your questions.

Jan Green

RE/MAX Excalibur
21803 N. Scottsdale Rd., Ste. 100
Scottsdale, AZ 85255

Cell (602) 620-2699

GotGreen.info® Green Maven Approved Site
Volunteer, U. S. Green Building Council, Arizona Chapter
Advisory Board Member, Efficiency First Arizona (EFAZ)
Member, Phoenix Green Chamber of Commerce & USGBC & EFAZ

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