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Patricia Row…, Home Buyer in New Orleans, LA

What are road home covenants?

Asked by Patricia Rowan, New Orleans, LA Fri Sep 4, 2009

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This question is about this property: http://www.trulia.com/property/1082650535-6945-Milne-Blvd-Ne…

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Its been awhile, but the question remains relevant because many (if not most) of the Road Home covenants have not yet been released.

First, just to clarify, the basic obligations contained in the covenants are to: (1) renovate and move in within three years of the latest closing with Road Home (i.e., if you accepted elevation or additional funds after the first closing, the three year period starts anew); (2) use the property as your primary residence (no rentals allowed); (3) keep hazard insurance once moved in and flood insurance if the home is in a flood zone; and (4) only transfer the property to a third party if you are in compliance with the covenants and have the third party agree to finish the remainder of the covenant period in compliance.

Second, regarding releases: although the covenants appear to expire on their face three years from the closing date with Road Home, that is NOT the position taken by OCD (the state department in charge of overseeing the Road Home program). OCD's interpretation is that the covenants must be released and there is a process to have this accomplished which involves an inspection of the property and submission of documents to prove compliance.

I disagree that buyers should avoid homes with covenants on them (unless the home is completely non-compliant or the buyer is investing in rental property). A competent title company will know how to address the covenants and their release so it shouldn't be a hurdle. The important thing is to be aware of the covenants, the obligations embodied in them and the process for releasing them BEFORE making an offer and to follow through wit the title company to make sure the covenants are in fact addressed.
0 votes Thank Flag Link Mon Jun 11, 2012
AS Craig mentioned most covenants are about to expire...and by the time you figure out the details you would be better off just looking at a home without them. I would strongly advise buying a home that has already been renovated...value for money you cannot beat it in this market.
Web Reference: http://iansellsnola.com
0 votes Thank Flag Link Fri Sep 4, 2009
People received Road Home MOney after Katirina. After acceptting the money they had to sign covenants with plans for the future. Within 3 years of accepting the funds they have to remain owning the property or transfer those covenants.

Many sellers are now transferring them, but miost of them are ending soon because of the amount of time after Katrina. There are also rules for example time period to build/renovate.

Email me if you need more details or if you would like me to send you some without covenants attached.
0 votes Thank Flag Link Fri Sep 4, 2009
Jan. 24th 2014 is the date received package from road home saying I owe all the money back. I sold the property on Nov. 2008, was told it was okay by road home many times. Closing on the property was performed by and attorney and papers include the new owners acknowledgment that the must continue the covenant. I had made all repairs to the property before selling and also used the remainder as a down payment on my current property. I was in CONSTANT communication with road home. About year ago I received a call from road home asking why I did not fill out a packet delivered to me. I once again explainded that I do not own the property anymore and gave the gentleman everything he asked for. He said everything should be fine and he'd call me back if he needed anything else. I called the current owners who have lived on the property ever since the purchase and they have insurance on the structure. I'm really confused because in 2008 there was no form to fill out or a release of covenant
Flag Sat Jan 25, 2014
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