GROUPS OF APARTMENT BUILDINGS WITH VARYING NUMBER OF UNITS IN EACH BUILDING

MAY BE LOW-RISE OR HIGH-RISE

MAY INCLUDE PARKING, SECURITY, CLUBHOUSES, SWIMMING POOLS, TENNIS COURTS, AND/OR GOLF COURSES

CONVENTIONAL OWNERSHIP (DEED)

OWNS UTIS INDIVIDUALLY AND SHARE OWNERSHIP OF COMMON FACILITIES (COMMON ELEMENTS) SUCH AS HALLS, ELEVATORS, SWIMMING POOLS, CLUBHOUSES, TENNIS COURTS, SURROUNDING GROUNDS

MANAGEMENT AND MAINTENANCE PROVIDED BY GOVERNING ASSOCIATION AND OUTSIDE CONTRACTORS

EXPENSES PAID OUT OF MONTHLY ASSESSMENTS CHARGED TO OWNERS

HAS UNITS THAT SHARE COMMON WALLS AND FACILITIES WITHIN A LARGER BUILDING

OWNERS DO NOT OWN UNITS - CORPORATION HOLD TITLE TO THE REAL ESTATE ITSELF

UNIT OWNERS PURCHASE SHARES OF STOCK IN THE CORPORATION - OWNERS GET PROPRIETARY LEASES AND A SHARE OF STOCK

PAY DUES

AKA MASTER-PLANNED COMMUNITIES

MERGE LAND USES SUCH AS HOUSING, RECREATION, AND COMMERCIAL INTO ONE SELF-CONTAINED DEVELOPMENT

PLANNED UNDER SPECIAL ZONING ORDINANCES

OWNERS DO NOT HAVE AN INTEREST IN COMMON AREAS

EX. RETIREMENT COMMUNITIES OFTEN STRUCTURED AS PUDs

MIXED-USE DEVELOPMENTS (MUDs)

(also HIGH-RISE DEVELOPMENTS)

COMBINE OFFICE SPACE, STORES, THEATERS, AND APARTMENT UNITS INTO A SINGLE VERTICAL COMMUNITY

USUALLY SELF-CONTAINED & OFFER LAUNDRY FACILITIES, RESTAURANTS, FOOD STORES, BEAUTY PARLORS, BARBERSHOPS, SWIMMING POOLS, ETC

AKA MOBILE HOME, LOW COST

IN HOUSING PARKS, OFFER COMPLETE RESIDENTIAL ENVIRONMENTS WITH PERMANENT COMMUNITY FACILITIES AS WELL AS SEMI-PERMANENT FOUNDATIONS AND HOOKUPS FOR GAS, WATER, AND ELECTRICITY

AKA PREFABRICATED HOMES

PREASSEMBLED AT A FACTORY, DRIVEN TO SITE, INSTALLED AND FINISHED ON-SITE

ALLOW MULTIPLE PURCHASERS TO SHARE OWNERSHIP OF A SINGLE PROPERTY, USUALLY A VACATION OR RESORT PROPERTY

ENTITLED TO USE PROPERTY FOR A CERTAIN PERIOD EACH YEAR, USUALLY A SPECIFIC WEEK OR MONTH

PAY PURCHASE PRICE AND ANNUAL MAINTENANCE FEE

HOUSING AFFORDABILITY

FHA AND VA

FEDERAL HOUSING ADMINISTRATION AND VETERANS AFFAIRS

HAVE PROGRAMS WITH LOW DOWN PAYMENTS AND LOWER CREDIT SCORE REQUIREMENTS

HOUSING AFFORDABILITY HAS BEEN AIDED BY CREATIVE FINANCING, LOW INTEREST LOANS, ADJUSTABLE-RATE LOANS, INTEREST-ONLY LOANS, AND LOW-DOWN-PAYMENT LOANS SPONSORED BY THE FHA AND VA

PRINCIPAL, INTEREST, TAXES, AND INSURANCE

THE BASIC COSTS OF WONING A HOME / MORTGAGE

WITH 10% DOWN, CAN NOT EXCEED 28% OF GROSS (PRETAX MONTHLY INCOME) TOTAL COST OF BUYING AND MAINTAINING A HOME 

TOTAL DEBTS CAN NOT EXCEED 36% OF GROSS

EX. $5000 GMI X 28% = $1400 TOTAL HOUSING EXPENSE ALLOWED

$5000 GMI X 36% = $1800 TOTAL HOUSING AND OTHER DEBT EXPENSE ALLOWED

1.) AS PROPERTY VALUE INCREASES A SALE MAY CREATE A  LONG-TERM GAIN - APPRECIATION

2.) AS DEBT IS REDUCED THROUGH MONTHLY PAYMENTS, OWNERSHIP INTEREST INCREASES - EQUITY INCREASE WITH AN AMORTIZED LOAN AS THE PRINCIPAL IS PAID

3.) TAX DEDUCTION AVAILABLE TO OWNERS

MAY DEDUCT SOME OR ALL OF MORTGAGE INTEREST PAID, REAL ESTATE TAXES, OTHER EXPENSES

CAPITAL GAINS TAXATION EXCLUSION OF $500,000 PROFIT IF MARRIED, $250,000 PROFIT IF SINGLE (MUST OWN AND OCCUPY AS RESIDENCE FOR AT LEAST 2 OF THE LAST 5 YEARS)

FIRST-TIME HOME BUYERS MAY MAKE PENALTY-FREE WITHDRAWALS FROM THEIR TAX-DEFERRED IRAs FOR DOWN PAYMENTS ON THEIR HOMES, SUBJECT TO INCOME TAX, LIMIT IS $10,000 AND MUST BE SPENT WITHIN 120 DAYS ON A DOWN PAYMENT

MORTGAGE INTEREST

REAL ESTATE TAXES (BUT NOT INTEREST ON OVERDUE TAXES)

CERTAIN LOAN ORIGINATION FEES

LOAN DISCOUNT POINTS (WHETHER PAID BY BUYER OR SELLER)

LOAN PREPAYMENT PENALTIES

COVERS:

• FIRE AND LIGHTNING
• GLASS BREAKAGE
• WINDSTORM AND HAIL
• EXPLOSION
• RIOT AND CIVIL COMMOTION
• DAMAGE BY AIRCRAFT
• DANAGE FROM VEHICLES
• DANAGE FROM SMOKE
• VANDALISM AND MALICIOUS MISCHIEF
• THEFT
• LOSS OF PROPERTY REMOVED FROM THE PREMISES WHEN IT IS ENDANGERED BY FIRE OR OTHER PERILS

COVERS:

• FALLING OBJECTS
• DAMAGE DUE TO THE WEIGHT OF ICE, SNOW, OR SLEET
• COLLAPSE OF ALL OR PART OF BUILDING
• BURSTING, CRACKING, BURNING, OR BULGING OF A STEAM OR WATER HEATING SYSTEM OR OF APPLIANCES USED TO HEAT WATER
• ACCIDENTAL DISCHARGE, LEAKAGE, OR OVERFLOW OF WATER OR STEAM FROM WITHIN A PLUMBING, HEATING, OR AIR-CONDITIONING SYSTEM
• FREEZING OF PLUMBING, HEATING, AND AIR-CONDITIONING SYSTEMS AND DOMESTIC APPLIANCES
• DAMAGE TO ELECTRICAL APPLIANCES, DEVICES, FIXTURES, AND WIRING FROM SHORT CIRCUITS OR OTHER ACCIDENTALLY GENERATED CURRENTS

REQUIRES THAT THE OWNER MAINTAIN INSURANCE EQUAL TO A SPECIFIED PERCENTAGE (USUALLY 80%) OF THE REPLACEMENT COST OF THE DWELLING (NOT INCLUDING THE PRICE OF THE LAND) FOR THE FULL COST TO REPAIR OR REPLACEMENT ON LOSS WITHOUT DEDUCTION FOR DEPRECIATION

IF NOT, THE LOSS WILL BE SETTLED FOR ACTUAL CASH VLAUE OR PRORATED AMOUNT

NATIONAL FLOOD INSURANCE ACT 1968

FEDERAL FLOOD INSURANCE PROGRAM

FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) ADMINISTER THE FLOOD PROGRAM

TO FINANCE PROPERTY WITH FEDERAL OR FEDERALLY RELATED MORTGAGE LOANS, OWNERS IN FLOOD-PRONE AREAS MUST OBTAIN FLOOD INSURANCE

REQUIRED ON ALL TYPES OF BUILDINGS, FOR EITHER THE VALUE OF THE PROPERTY OR THE AMOUNT OF THE MORTGAGE LOAN, SUBJECT TO THE MAX. LIMITS AVAILABLE

NATIONAL FLOOD INSURANCE PROGRAM (NFIP)

FEMA DEFINES A FLOOD AS "A GENERAL AND TEMPORARY CONDITION OF PARTIAL OR COMPLETE INUNDATION OF TWO OR MORE ACRES OF NORMALLY DRY LAND OR TWO OR MORE PROPERTIES FROM:

• AN OVERFLOW OF INLAND OR TIDAL WAVES
• AN UNUSUAL AND RAPID ACCUMULATION OR RUNOFF OF SURFACE WATERS
• MUDFLOWS OR MUDSLIDES ON THE SURFACE OF NORMALLY DRY LAND
• THE COLLAPSE OF LAND ALONG THE SHORE OF A BODY OF WATER (UNDER CERTAIN CONDITIONS)

PHYSICAL DAMAGE TO A BUILDING OR PERSONAL PROPERTY "DIRECTLY" CAUSED BY A FLODD IS COVERED BY FLOOD INSURANCE POLICIES

TWO TYPES OF POLICIES:

1.) REPLACEMENT COST VLAUE (RCV)

2.) ACTUAL COST VALUE (ACV)

• LENGTH OF TIME THE INDIVIDUAL WILL RESIDE IN AREA
• INDIVIDUAL'S FINANCIAL SITUATION
• HOUSING AFFORDABILITY
• CURRENT MORTGAGE INTEREST RATES
• TAX CONSEQUENCES OF OWNING VS RENTING
• WHAT MAY HAPPEN TO HOME PRICES AND TAX LAWS IN THE FUTURE