A restrictive covenant is a rule that comes with your property that tells you what you can and can't do with it. When the property sells, it stays with it, which means that every new owner has to follow the same rule. These rules are most common in communities and condo developments that are run by a HOA. The rules could say what colors of paint you can use, how many pets you can have, how you can use the property, or how you can add to the building. AmeriSave's prequalification process can help you start the financing conversation while you look into the property's covenant history through a title search if you're buying a home and want to know what restrictions come with it.

Covenants don't usually change the terms or interest rate of your loan. When lenders figure out your debt-to-income ratio, they include the HOA fees that come with covenant-controlled communities as part of your monthly housing costs. For example, if you pay $250 a month in HOA fees, that amount is added to your mortgage payment, property taxes, and homeowners insurance. That could change how much you can borrow. You can use AmeriSave's mortgage calculator to include HOA fees, which will give you a better idea of how much you will have to pay each month before you buy a home.

Of course. Most HOAs use a system of graduated penalties to enforce covenants. First, you'll get a warning. If you break the rules again, you'll get a fine. Some groups double the fines for each repeat offense. An HOA can do more than just fine you. They can also put a lien on your property for unpaid fines, take away your access to shared amenities, or even sue you. If you don't pay your liens, they could lead to foreclosure in some states. Reading the CC&R documents before you buy and staying in touch with your HOA board if problems come up are the best ways to protect yourself. AmeriSave's staff can explain how costs related to your HOA might affect a refinance or the sale of your home in the future.

The title search should be the first step. When you apply for a mortgage, the lender does a title search to find out if there are any restrictions on the property that have been recorded. The HOA or the seller can also give you the Declaration of CC&Rs if you ask for it. You can look up a property on your own before making an offer because the county recorder's office keeps public records of deed restrictions. AmeriSave's ComeHome app helps you start looking at neighborhoods and homes early in your search, so you can do your research before you sign a contract. As part of the property research, your real estate agent should also be able to get covenant documents.

No. Under the Fair Housing Act, racial restrictions and any other type of discrimination based on race, color, religion, sex, national origin, disability, or family status are illegal. The Fair Housing Act made them illegal, and the Supreme Court's decision in Shelley v. Kraemer made them impossible to enforce. Some old deeds still have this discriminatory language in them, but it doesn't mean anything in court. Many states now have ways for homeowners to get rid of the bad language in their deed records. The resource page on Fannie Mae's website keeps track of which states have passed laws to make it easier to remove covenants. If you see this language in your deed, call your county recorder or a real estate lawyer.

Yes. Some covenants end on their own after a certain amount of time. A supermajority vote of the homeowners in the community can change some things. Depending on the CC&Rs and state law, this usually means that 67% to 75% of homeowners must agree. Homeowners can also ask a court to get rid of covenants that are no longer useful, are too old, or don't serve their original purpose. It is even easier to get rid of discriminatory covenants because they are already illegal under federal and state law. If you want to buy a house with covenants that you want to change, you should talk to a real estate lawyer about how to do it in your state. You can also use AmeriSave's resource center to learn how changes to covenant terms might affect your plans to buy a home.

Zoning laws are rules set by the government that control how land can be used in whole areas. For example, they keep residential areas separate from commercial or industrial areas. Restrictive covenants are private agreements that are part of property deeds or CC&Rs and only apply to certain communities or properties. Local governments set zoning rules, while developers, HOAs, or previous property owners set covenants. They both can stop you from doing things with your property, but they work in different legal ways. Zoning rules and private covenants can both apply to the same property at the same time. AmeriSave's team can help you figure out the financing implications of the rules on a certain property while your real estate agent takes care of the legal details.

Yes, almost all of the time. Every homeowner in the community agrees to follow a set of CC&Rs that make up the whole structure of a HOA. According to data from the Foundation for Community Association Research, about 82% of new homes that sold are now part of HOA communities. That means that more and more new home buyers are choosing to live under covenants. The covenants for a HOA community were set up when the community was first built, and they are passed on to each new owner through the deed. With ComeHome by AmeriSave, you can look up homes and neighborhoods as part of your decision-making process. If you know early on if a property has a HOA, you can plan your budget and set the right expectations.