Buying a home in Arroyo Grande

The vacation-rental cap is full

A vacation rental, where the owner is not present, and a homestay each need a Minor Use Permit and a business license. The City's cap on vacation rentals has been reached, so complete applications go on a waiting list, and a new rental may not sit within a set distance of an existing one or of a school. A purchase planned around short-stay income cannot count on getting a permit.

Sources:City of Arroyo Grande, short-term rental regulations

The Village historic overlay

For a home in the City's Historic Character Overlay District, the City's Village design guidelines cover new construction and exterior changes, which can require a Plot Plan Review before the building permit. The City reviews a request to demolish or relocate a building first.

Sources:City of Arroyo Grande, Village design guidelines

Creeks and flood zones

FEMA's special flood hazard areas follow Arroyo Grande Creek, Los Berros Creek, the East Fork of Meadow Creek and other streams through parts of the city. For a home in a special flood hazard area, federal law requires flood insurance on a loan from a federally regulated lender or a federal agency lender, and the current map decides it for each building.

Sources:FEMA Flood Map Service Center, Arroyo GrandeUnited States Code, title forty-two, section on flood insurance purchase requirements

Pre-qualification letter in Arroyo Grande

In Arroyo Grande, the listing agent reads your pre-qualification letter against a permit picture without a coastal step. The city lies outside the Coastal Zone, so your plans for the house go through City permits alone. On the State Fire Marshal's map, parts of the city are High or Moderate and none is Very High. The insurance premium a lender counts in your payment follows the parcel. FEMA's special flood hazard areas follow Arroyo Grande Creek, Los Berros Creek and the East Fork of Meadow Creek. For a home in one, federal law requires flood insurance on a loan from a federally regulated lender, and that premium joins the payment behind your letter. In the Village's Historic Character Overlay District, exterior changes can require a Plot Plan Review before the building permit, which matters to a renovation plan more than to the letter itself. USDA's map places the city outside its eligible area, so a letter here does not name a USDA loan. If the price is above the county's conforming limit, your letter has to name a jumbo loan and not a conventional one. Our letter states the program and the amount your file supports; it is not a commitment to lend, and it says so.

Sources:FHFA conforming loan limits by countyCalifornia Coastal Commission, Coastal Zone boundary map for San Luis Obispo CountyState Fire Marshal, fire hazard severity zone mapFEMA Flood Map Service Center, Arroyo GrandeUnited States Code, title forty-two, section on flood insurance purchase requirementsCity of Arroyo Grande, Village design guidelinesUSDA Rural Development, property eligibility map

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Investment property in Arroyo Grande

Arroyo Grande has reached the City's cap on vacation rentals, which bears on the rent a DSCR lender counts. A vacation rental, where the owner is not present, needs a Minor Use Permit and a business license, and complete applications go on a waiting list. A new rental may not sit within a set distance of an existing one or of a school. If you plan a purchase around short-stay income, you cannot count on a permit. The rent a DSCR lender reads here is the long-term market rent on the appraiser's schedule. Because the city lies outside the Coastal Zone, an accessory dwelling unit needs no coastal development permit. The City's Pre-Designed ADU program is one route if you are adding a unit to rent. What Arroyo Grande's rules leave open to you as an investor is long-term rent, and an ADU without a coastal step.

Sources:City of Arroyo Grande, short-term rental regulationsCity of Arroyo Grande, accessory dwelling units

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