Lennar has started contacting its in-escrow buyers for its West Hills, West Creek and RiverVillage developments in Valencia to restructure their offer for free homeowners association (HOA) dues for the first two years. Apparently they have been encountering some resistance to this program from lenders, so they've opted to turn these funds into a different type of credit. Buyers are being given the choice of using the funds originally allocated towards the HOA credit for either interest rate buy-downs or window coverings upgrades instead. What does this mean to you as a buyer? First of all, you'll not have a 2-year hiatus on your HOA payments, so you'll need to include that in your cash flow projections. Secondly, you'll need to make sure that all of these additional funds are used up through escrow, whether through closing costs and interest rate buy-downs, or upgrades. The amount of costs covered by Lennar for the purchase of your new home will not be readily apparent on your estimated closing statement from escrow, so you'll need to take extra steps to make sure that you're not leaving money on the table with this new arrangement. The credit from Lennar can only be used as a credit towards your closing costs and upgrades, and will not be refunded to you if you don't use it up! What's the best way to use this credit from Lennar? It depends! You'll need to talk with Lennar's loan agents to determine how much can be used to buy down your interest rate, and what effect that will have on your monthly payment. If you don't have enough of a credit to buy down to the next rate level, then you may be better off using that credit for window coverings instead. | 
