FHA Condo Relief Coming: President Signs Bill
President Obama has signed H.R. 3700 – the “Housing Opportunity Through Modernization Act” into law. The National Association of REALTORS® hailed the development as a “significant step” in eliminating barriers to safe, affordable mortgage credit for condos.
The bill was approved unanimously by the U.S. House in February and the Senate two weeks ago. NAR has long been an advocate of the bill, testifying before Congress and lobbying for its passage. Additionally, nearly 140,000 REALTORS® across the country voiced their support for the legislation during the NAR call for action.
“REALTORS® have reason to celebrate today as legislation easing restrictions on FHA financing for condominiums is finally signed into law,” says NAR President Tom Salomone. “This is a long-awaited victory for NAR and for home buyers for whom condos are an important and affordable option.”
The bill will make Federal Housing Administration’s recertification process “substantially less burdensome” and will lower FHA’s owner-occupancy requirement from 50 percent to 35 percent, NAR has reported. The bill also requires the FHA to replace an existing policy on transfer fees with a less-restrictive model that has already been in place at the Federal Housing Finance Agency.
This legislation will help offer to relief to well-qualified potential home buyers who have been facing tight housing inventories, rising home prices, and strict mortgage credit underwriting guidelines, Salomone has said.
“Condominiums often represent an affordable option that’s just right for first-time and low-to-moderate income home buyers,” Salomone said in a statement after the Senate approved the bill in July. “Overly burdensome restrictions on condo financing have for too long put that option out of reach for many creditworthy borrowers. This legislation meets those restrictions head on, putting the dream of home ownership back in reach for more Americans.”