What is a Planned Unit Development (PUD)?

The lines between condos, townhomes, co-ops and planned unit developments (PUD) can get blurry. Here’s the definition of PUD and what you need to know before you buy PUD real estate.

A Planned Unit Development (PUD) is a community of homes that could look like single family residences, townhomes or condos, and can include both residential and commercial units, but on paper, they’re most similar to condos. When you’re shopping for homes and see the type of ownership listed as "condominium," even though the home looks like a typical house or townhome, then it’s most likely a PUD.

A PUD includes ownership of a "lot," with common areas either owned by a homeowner’s association (HOA) or collectively by all invested parties. If you buy a home within a planned unit development, you’ll have to pay homeowner’s association dues. PUDs often have amenities beyond the scope of most condos, like private tennis courts and outdoor playgrounds that are maintained by HOA fees and only open to homeowners. The monthly dues can be very high in some communities, so it’s important to include them in your monthly budget when deciding whether or not to buy a PUD.

Before You Buy

Planned unit developments also come with rules and regulations set by the HOA, which you’ll want to ask for before you buy so you know exactly what you can and can’t do with your property. Redfin Agents often advise their clients to meet with the HOA president and review the meeting notes from the past six months to understand how the association makes decisions before making an offer.

Mortgage lenders will review a loan for a home in a PUD in the same way as they would a condo; the PUD needs to meet certain requirements, like having enough reserves saved up, proper insurance coverage, and reputation for collecting dues on time. If the PUD does not meet their requirements, you could be rejected for a loan.

There’s growing demand for PUDs because they offer incredible convenience, with restaurants and even dental clinics often right downstairs. And thanks to the homeowner’s association and shared amenities, PUDs can have a greater sense of community, where neighbors get to know each other well. However, the HOA dues can turn off some buyers.

If you’re in the housing market and thinking about buying a home in a planned unit development, be sure to talk to a real estate agent about the extra steps you should take before you buy and what it might mean for your home value down the road.

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