Creative Financing and HOAs: What Boards Need to Know

Homeowners associations often view investors with caution, and for good reason. Renters can create challenges for enforcement, maintenance, and overall community cohesion. But in this episode of The Uncommon Area, Matthew Holbrook sits down with Caleb Christopher of Creative Transaction Consulting and Creative Title Company to explore a different perspective: what if HOAs could work with investors—and on their own terms?

Caleb walks us through creative financing, which includes strategies like seller financing and subject-to transactions. In simple terms, these approaches allow buyers to purchase homes without using traditional bank loans. Sellers can effectively act as the bank, offering financing directly to the buyer, or investors can step into existing low-interest loans, providing opportunities for home buyers who might otherwise struggle to get a mortgage.

For HOAs, this raises questions. How should boards handle investor purchases? What rules need to be communicated? Caleb emphasizes that clarity is key. Associations should make it easy for buyers and investors to understand rental policies, short-term rental restrictions, and any caps on investor ownership. Clear, public-facing disclosures—whether through a website, a document like Homewise Docs, or upfront notices—can prevent conflicts and wasted transactions.

The conversation also touches on emerging trends like co-living or rent-by-the-room arrangements. These setups, where multiple unrelated individuals live in a single home, are becoming more common in some markets and, in some cases, protected by state legislation. Boards should be aware of these trends and consider proactive policies for parking, tenant agreements, and enforcement.

Caleb also challenges boards to think differently about investors. While renters can create challenges, investors who are focused on homeownership rather than rentals can actually benefit a community by increasing demand and supporting property values. By setting clear rules and communicating expectations upfront, HOAs can potentially work with investors in a way that aligns with the association’s goals.

Key takeaways for boards and managers:

• Creative financing allows investors to buy and sell homes without traditional banks.
• Clarity in rules, rental caps, and enforcement is essential to prevent conflicts.
• Public-facing information about the community protects both HOAs and potential buyers.
• Emerging trends like co-living may require proactive policies.
• Thoughtful collaboration with investors can sometimes benefit property values.

Ultimately, this episode highlights that homeowners associations don’t have to see investors as adversaries. With clear rules, open communication, and strategic planning, boards can protect their communities while adapting to a changing housing landscape.

Listen to the full episode for a deeper dive into creative financing, HOA considerations, and strategies for bridging the gap between investors and communities.

Check out Caleb's Youtube Channel!