It’s a well-known fact that housing costs are through the roof in some real estate markets. These high price tags make house hunting a challenge for many of our Pennsylvania clients! Resale restrictions are sometimes put in place to keep housing prices at bay. What does this mean when it’s time to apply for a mortgage?
At MortgageDepot, we want affordable housing to be accessible to our clients. That’s why we work with lenders that allow certain property types to have resale restrictions.
What Are Resale Restrictions?
As you embark on your quest for a home, you might see that some properties have resale restrictions. Here is a quick rundown of what that means:
If you decide to sell the home in the future, you might only be able to sell to people with certain income levels or those of a particular age group.
Likewise, there might be a limit to the price you can put on the home. If this price is lower than the market value of the property, you’ll receive a subsidy for the difference.
Resale restrictions are in place until they are formally revoked, usually during foreclosure or deed-in-lieu proceedings.
Fannie, Freddie and Their Resale Restrictions
Fannie Mae and Freddie Mac allow properties with the following resale restrictions:
Age-based resale restrictions (properties located in 55 and older communities)
Income restrictions, including low-income housing
Other Considerations for Resale Restrictions
If you need a mortgage to purchase a home with resale restrictions, here are three additional conditions that might apply to your situation:
The right of first refusal cannot exceed 90 days from when the property is listed for sale.
Resale restrictions cannot come from the builder or developer of the property.
Income restrictions only apply to primary one-unit residences, such as detached homes, PUD homes or single-unit condos. Manufactured homes don’t qualify.
Contact Us Today!
If you need a mortgage in Pennsylvania, MortgageDepot is here for you! Contact us today to learn how resale restrictions could affect your mortgage process.