Sober Living Houses in Arizona Are Easy to Come By
Posted on 01/05/18: Addiction Treatment
Frustration, anger and fear envelopes a neighborhood once there is evidence of a sober living house in its midst. Of course, it isn’t the homes that bear these feelings of discontent but those who inhabit them. While we cannot change their perception of sober living (though I will attempt to in a later blog) the following emphasizes the process of residential property acquisition and why some sober living houses in Arizona are easy to own.
Cash May Be King, but a Loan Is the Next Best Thing
Not all sober living homes are created with ill-intent. There are owners that genuinely want to help those in addiction recovery rebuild their lives and cohabitating with others in a “normal” residential setting helps provide the emotional support and comradery needed to see them through. These types of homeowners may already have a property that was used for their own family but at some point, they chose to convert to a sober living facility. This is where intent comes into play.
Short-term Gain, Long-term Problem
For anyone setting out to purchase a home for sober living use that needs a mortgage to make it happen, there are guidelines that must be met. Unfortunately, there are easy workarounds.
If you want to buy a home and don’t currently own a property, you meet with a mortgage lender and go through the prequalification process, find a property, negotiate, agree to terms and conditions and sign on the dotted line, which can typically take 30-45 days.
If you are purchasing as an owner-occupant, meaning you are planning on living in the home as your personal residence, there are more options available to you: Down payment grant funding, lower interest rates, less down payment required. If you are purchasing the home as an investor, not occupying the premises, then down payment grants are not available, and 20 to 30 percent of the purchase price is required as the down payment. From a financial standpoint, you might be thinking to yourself that it is more cost-effective to purchase as an owner occupant as there are less out of pocket costs involved.
Hiding the Truth Is a Losing Proposition
Contemplating the what-ifs in this, I spoke to Jason Harrelson, a loan consultant with Academy Mortgage, to find out what the regulations are, if any, about purchasing a home for sober living and what the roadblocks are in the funding process.
During the initial prequalification for the loan, and within supplemental loan disclosures and notarized closing documents, the buyer is asked to declare that he or she is purchasing as an owner occupant to live in the property as a primary residence. This happens if the loan being obtained is an owner occupant loan from Fannie Mae or Freddie Mac. With these multiple touchpoints “a buyer is basically asked repeatedly about their intent in property ownership,” Harrelson said. With unethical sober living home owners, the lies about disclosure are part of their process.
Cheaters Never Prosper, But Reality Can Help
Can intent change? Of course. I’ve known plenty of people, as I’m sure you have as well, that move into a home thinking they are going to live there for quite some time. Then something happens in their lives – a job change, relationship breakup, having kids, that makes the intent and actuality no longer a good fit.
But this is different. “Unless you are going to live in the property, the sober living situation is a commercial use, from a lender perspective,” Harrelson pointed out.
I pressed the issue, “So what you’re saying is that a buyer can go through the loan process, tell you that they are intending on living there, but then ultimately do what they want and you’d never even know.” He reluctantly nodded in agreement, but then paused.
“We do check on occupancy the first sixty days after the loan has funded,” replied Harrelson. I wanted to know what would happen if the buyer was found to have committed fraud – because that’s what this is, fraud. “You want to know what I’d do or what my office would do if we learned later that the buyer lied?” he asked.
At first, he reminded me of the owner-occupancy guidelines from Fannie Mae and Freddie Mac and that under those stipulations, they have the right to call the loan, which is to demand full payment of the loan balance. “Okay,” I noted, “but then who tells them that the guidelines weren’t followed… you?”
The response was a reluctant, “Probably not.”
HOAs Provide an Unlikely Safeguard
There’s a reason why would-be sober living homeowners search for properties in communities that do not have a homeowners’ association (HOA) attached – less regulation. While towns and cities have their own rules regarding property ownership and use, they are much less stringent than an HOA.
For years, many HOAs contain specific conditions that can bar business use or have detailed guidelines on renting to others. This is put into place to protect the integrity of the neighborhood and to keep homeowners on a more level playing field. Some might refer to HOAs as collective control freaks.
To further help combat the uptick in unethical sober living houses (one could be coming to your neighborhood soon) HOAs in Arizona could consider adding language to their CC&Rs (Covenants, Conditions, and Restrictions) that precludes any home from being used as a sober living facility.
Addiction and Fair Housing Is Controversial
HOAs and local municipalities property restrictions can teeter on the fine line of what is fair and what is discriminatory. Because drug and alcohol addiction is a disease, those going through addiction recovery living in sober houses could fall under the ADA or American Disabilities Act, as mental illness and emotional impairment are common as a result of substance abuse and throughout sobriety.
Communities across the State continue to question and demand an exacting definition of the intangible and equitable rights of residential homeowners and those living through addiction recovery in their neighborhoods.
On December 13, 2017, the Phoenix City Council formalized and approved a plan to license sober living homes and expects it to be actualized sometime in March 2018. Will the details of the guidelines be enough to dissuade unethical sober living practices? Residential communities and those looking to embrace a life of sobriety can only hope regulation supports both sides of the issue.
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