As the housing market begins to show signs of life in East Tennessee, associations need to be vigilant in taking care of community business.  Lending rules have changed, and it’s not as easy to borrow as it was just a few years ago.  How well your association is managed, the budget, reserves and more can affect a prospective buyer’s ability to get a mortgage. These modifications in today’s mortgage world can have significant consequences for common interest communities, so advance preparation is essential.

Are your HOA financial records in good order? Lenders need to know that your budget is sufficient to maintain the community and that your reserves are funded according to a current reserve study. Collections and homeowners in arrears also play a role in your overall financial status.  If you have some gaps in financial management, now is the time to set it right.

Your assessment history is another area that lenders evaluate. It’s common for lenders to request an itemized list of areas covered by your assessment. For example, if assessments in your community cover insurance, exterior maintenance, utilities, clubhouse, etc., this should be documented for the lender. They will also evaluate the frequency and reason(s) for special assessments to help them determine the effectiveness of your community management.

Lenders are always concerned about risks associated with a community that could negatively affect the buyer’s ability to repay a loan. Pending litigation for a homeowner association can have widespread consequences that include special assessments, maintenance of the property and other uncertainties.  Sometimes, all it takes is one lawsuit to close the door for mortgages. While some of this may be out of your control, resolve any outstanding issues that you can.

Perspective lenders and buyers will probably ask about your owner-occupied percentage vs. rental property. By-laws and the association’s governing documents are also important considerations.  Make sure your HOA Board has everything in order so you have the answers when you need them.


At Wise Property Solutions, we provide a variety of services to keep your association running smoothly. Contact us if you need help in taking care of business. Or, your Board can get your HOA business affairs in order if they have the bandwidth.  The bottom line is to make sure that your HOA is well managed so that you don’t hinder a buyer’s ability to get a home loan.


Wise Property Solutions is a property management company serving East Tennessee (including: KINGSPORT, TN | JOHNSON CITY, TN | BRISTOL, TN | ELIZABETHTON, TN | ERWIN, TN | BRISTOL, VA | KNOXVILLE, TN)  with offices in Knoxville, TN and the Tri-Cities, TN. Specializing in Condominium Association Management, Home Owners Association Management, HOA Management and Gated Community Association Management.  The firm is East Tennessee’s only Accredited Association Management Company (AAMC®).   


Knoxville, TN: 865-643-8989

Tri-Cities, TN: 423-926-7373

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