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Buying New? A Term You Should Know: Capital Contribution May 13, 2009

Posted by Laura Schwartz in First-Time Buyers, New Construction.

Here’s a term you don’t hear often: Capital Contribution.

-What is a capital contribution? A “fee” that is incorporated into your closing costs at settlement to be contributed to the working capital fund of the homeowners association. Consider it the equivalent of a minimum balance to opening a bank account.

-How much is it usually? While every development is different, in Northern Virginia it’s usually equivalent to 2 months of the condo fees.

-Who pays for it normally? First time buyers of a new construction project foot the bill for this one.

Come on, there has to be a catch to buying something BRAND NEW, right? 🙂



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