HOA vs PUD: All about PUD housing

PUD neighborhood, HOA vs PUD: What is a PUD?What is the difference between an HOA and a PUD? As a prospective homebuyer, it's crucial to gain a clear understanding of the various types of housing communities. Among these, Homeowners' Associations (HOAs) and Planned Unit Developments (PUDs) play significant roles. Understanding the distinction and relationship between the two is key, as they can greatly influence your living experience.

This article will provide you with a comprehensive understanding of the HOA vs PUD discussion, what their differences are, what a PUD home is, and how HOAs and PUDs collaborate to shape your living environment.

What is a PUD?

PUD stands for Planned Unit Development (PUD), a type of housing that blends commercial and recreational amenities within one community. These usually include single-family homes, townhouses, and sometimes apartments. Like many other communities, you can find amenities such as swimming pools, clubhouses, and playgrounds within a PUD home. These communities can also have grocery stores, restaurants, and other commercial units. Some PUD communities even include amenities such as office spaces, religious institutions, education, and recreation areas! The convenience of placement of these amenities nearby makes a PUD home sought after by many, as they come with many advantages.

Another essential part of these homes is their incorporation of HOAs. All PUDs have an HOA that facilitates and manages community regulations, maintenance, and amenities. Therefore, one of the quickest ways to know if your property is considered part of a PUD is to check if they charge HOA fees.

What is an HOA?

A homeowners' association (HOA) is a legal organization comprised of community volunteer members. These serve with a governing body that helps manage residential communities such as subdivisions, condos, and planned unit developments (PUDs). HOAs use a governing body and include specific homeowners association rules created by the board members to upkeep community standards. To successfully develop and maintain these standards, HOAs collect homeowner association fees to help keep their property value and enhance shared services and amenities, including pools, parks, and clubhouses!

If you purchase any property that contains an HOA, this will automatically make you part of the community. If this is the case, you would need to adhere to the HOA guidelines, pay perspective HOA fees, and often have many involvement opportunities within events or leadership decisions. If you're interested in purchasing in an HOA community, consult with the board or realtor to ask about specific guidelines, regulations, fees, and additional information you may need from them.  Get the full scoop on HOAs and their role here.

The HOA vs PUD relationship

When it comes to choosing a property, it's important to understand that HOAs and PUDs are not rivals, but rather, they work in tandem. While all PUDs have HOAs, not all HOA-managed communities are PUDs. Think of HOAs and PUDs as separate but interconnected entities in the housing world, each with its own unique role and function.

In simpler terms, PUDs refer to the physical development itself or a designated area mixed with different housing types that often share amenities. These developments are designed to offer a cohesive community feel while providing various living options that cater to different preferences and needs. The concept of PUDs can allow for maximum land use, which helps create multiple options that encourage a higher sense of community among residents through all the shared and diverse common spaces.

On the other hand, HOAs serve as the legal entities that govern a community. As previously mentioned, HOAs serve to set rules, collect dues, and maintain common areas. It's crucial to note that with their connection, ownership is one of the most essential aspects in which they differ. As PUD homeowners typically own the entire property area, HOA-managed communities might not own the land the unit is on. This is often seen with renters; in such cases, renters would have to abide by bylaws, rules, and all regulations put in place by the HOA, yet the property owner would be responsible for the fees.  

When trying to identify your property type, examine property documents and search for any keywords that indicate the presence of an HOA. This will indicate if they are truly a PUD community or not. You may also contact property management or consult a real estate agent to gather additional insights into the community, property type, and possible management structure.

PUD housing frequently asked questions

  1. What do PUD owners own?

    PUD owners typically own their dwelling units, such as single-family homes, townhouses, apartments, etc. They may also own their lot, the land where their property sits. With this ownership, PUD owners may have fewer restrictions on the changes they decide to make to their homes as long as they abide by HOA regulations, bylaws, and rules.
  2. What is the difference between a PUD and a detached condo?

    The main difference between PUDs and condos is the property ownership. In a PUD home, the homeowner owns the land on which the property was built. In a condo, the condo association is who owns the land. If you live in a PUD, you are free to alter portions of your residence as you please if they abide by the regulations of your prospective HOA. If you live in a condo, you may require special permits to make any enhancements or alterations to your home. This also comes with maintenance responsibility, as PUD homeowners might oversee maintaining their yards and internal maintenance. Meanwhile, condo communities have maintenance that is included in their HOA fees. Another difference might be seen within the items within your HOA fees, as PUD homes typically include private security or general landscaping for communal areas.
  3. How does a PUD affect my mortgage?

    When lenders are considering the type of housing you have, qualifying for a mortgage in a PUD home is similar to that of other homes that include HOA fees. Take in mind that the rate of HOA fees in a PUD home can alter your DTI (Debt-to-Income) ratio and impact the loan amount or mortgage you qualify for. Additionally, how your HOA is managed, and the number of reserves can also influence your approval.
To learn how a professional management company like FirstService Residential can support your community, contact a member of our team.
Thursday June 20, 2024