When we asked REALTOR® Elizabeth Blakeslee what exactly a Home Owners Association was her answer was simple: “A system of communal living.”

An HOA can take care of small things, like yard maintenance at your townhome, to big things, like paying for your subdivision’s pool, or mediating disputes between neighbors. And while we’ve heard horror stories about overzealous HOAs, they are a good thing. Without them, you might wake up one morning to find your neighbor’s house painted purple!

Elizabeth says that if you’re buying a home and are concerned about restrictions, make sure you read the rules! If you’re looking at a home in a neighborhood with an HOA, they are required to give you a list of regulations and fees associated with the group. For example, Elizabeth says in Washington, DC, you’re allowed three business days. Take a close look at their budget, as well, to see what they spend your money on. If you don’t like it, or don’t like the rules associated with it, look elsewhere for a home.

Every association has a different level of governing depending on where you are. Some associations in subdivisions watch over everything from how you mow your lawn to the color of your home to the height of your fence. They also take care of common areas, including playgrounds, tennis courts and pools. Smaller communities generally have less oversight. Elizabeth also notes that the more there is in your community, the higher your HOA fees are likely to be. Make sure you take that into account when you’re shopping for a home!

Elizabeth Blakeslee is NAR’s 2008 Regional Vice-President for the Mid-Atlantic Area, and a REALTOR® with Coldwell Banker Residential Brokerage in Washington, D.C.

The tradition of being able to deduct the mortgage interest from your income — and cut your taxes — is one of the primary benefits of homeownership.

Now that deduction is in trouble.

The Obama budget proposes putting some income requirements on this practice.  Any family, making more than $250,000 a year, may no longer be able to deduct mortgage interest should this proposal go through.

The administration says it needs this cut in order to pay for other spending programs;  they believe that cutting back on this deduction is the best way to come up with the extra revenue.  We’ll keep tracking this story as it develops.

In other news from the latest housing report*:

• Existing home sales dropped in January by nearly 9% compared to the month and the year before.  Buyers are apparently waiting for more news from the economic stimulus package before jumping into the housing market.
• Prices are also down by nearly 15% in the past year.   The recession marches on.
• But the good news?  Housing inventory is down:  The total number of homes for sale has dropped to a two-year low;  that’s an encouraging sign for the markets ahead. 

 *Housing Report from the National Association of Realtors^®