Why are rental restrictions becoming popular?
Over the past couple of years, there have been an increasing number of requests for amendments to the documents placing restrictions on the rental of units. The main focus has been to put a cap on the number of permitted rentals. Many owners ask why this is important. The #1 reason seems to be that a high number of rentals in a community can cripple an owner’s ability to secure financing. Secondary mortgage agencies, including Freddie Mac, Fannie Mae and VA, impose restrictions on the percentage of rental units in a homeowner’s association or condominium. If rentals exceed those limits, owners who want to refinance can find it difficult to secure a normal rate or even obtain a loan. While the allowable percentage can vary by agency, the typical threshold is around 30%, but it can go as high as 50%. The second driving force behind rental caps is the widespread perception that renters do not respect and maintain property to the same degree as owners and are not as involved in the communi
