FHA Condo Legislative Update
Great news for FHA condominium approvals. Hopefully, we will start to see many more condos approved for FHA financing…
Last week, the Senate unanimously approved H.R. 3700, the Housing Opportunity Through Modernization Act. The House previously approved the legislation unanimously in February. Among its nearly 20 provisions, this legislation would require FHA to streamline its condominium project recertification requirements.
- Reform the FHA condo recertification process, a costly process that has to be repeated every two years
- Lower the FHA's current owner-occupancy requirement from 50% to 35%
- Require the FHA to replace their policy on transfer fees with the Federal Housing Finance Agency's less-restrictive model
- Streamline the exemptions process for FHA's rule prohibiting certification of condominium projects with more than 25% commercial space
In particular, H.R. 3700 deals with key problem areas facing buyers and sellers of condominiums. Among these, the bill addresses FHA’s recertification process, taking steps to make it “substantially less burdensome,” according to the bill text. The current FHA recertification process is often costly, and noted that condominium developments must repeat this process every 24 months. H.R. 3700 includes changes to FHA policies that will give current owners and potential buyers of condos access to more flexible and affordable financing and a wider choice of approved condo developments.
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