WASHINGTON – Aug. 2, 2016 – President Obama has signed H.R. 3700 – the "Housing Opportunity Through Modernization Act" – into law.
The move paves the way for more condo sales, especially in Florida. First-time buyers will soon find it easier to qualify for a mortgage in more condo developments, and, as a result, more current condo owners will find it easier to move up to a single-family home.
The National Association of Realtors®(NAR) hailed the development as a "significant step" in eliminating barriers to safe, affordable mortgage credit for condos.
The bill previously passed both the U.S. House and Senate with a unanimous vote. It passed the House in February and the Senate two weeks ago. NAR, an advocate of the bill, testified before Congress and lobbied for passage.
Passage was also the topic of NAR's recent Call for Action, where it asked Realtors nationwide to write to their lawmakers an encourage passage. Overall, 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, president of NAR and broker-owner of Real Estate II Inc. in Coral Springs, Florida. "This is a long-awaited victory for NAR and for homebuyers for whom condos are an important and affordable option."
The bill will make the Federal Housing Administration's (FHA) recertification process "substantially less burdensome" and will lower FHA's owner-occupancy requirement from 50 percent to 35 percent. The bill also requires 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 (FHFA).
This legislation offers relief to well-qualified potential homebuyers who have been facing tight housing inventories, rising home prices and strict mortgage credit underwriting guidelines, Salomone says.
"Condominiums often represent an affordable option that's just right for first-time and low-to-moderate income homebuyers," 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 homeownership back in reach for more Americans."
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