Last month the U.S. Senate passed and the President officially signed H.R. 3700, the "Housing Opportunity Through Modernization Act." The new law is slated to make several reforms to Federal Housing Administration (FHA) and Department of Housing and Urban Development (HUD) programs that are aimed at increasing access to affordable rental housing, providing assistance to low-income renters, and increasing homeownership, particularly for first-time home buyers.
The "Housing Opportunity Through Modernization Act" seeks to modify several programs administered by HUD, including the Housing Choice Vouchers and homelessness prevention and assistance programs. The legislation eases restrictions on the purchase of condominiums with FHA, a move strongly championed by the National Association of Realtors.
The nation Realtor group praised the legislation as a significant step toward eliminating barriers to safe, affordable mortgage credit for condos. "Condominiums often represent an affordable option that's just right for first-time and low-to-moderate income home buyers. Unfortunately, overly-burdensome restrictions on condo financing have for too long put that option out of reach for many creditworthy borrowers," said Tom Salomone, president of the National Association of Realtors.
Changes in the new law include efforts to make FHA's recertification process "substantially less burdensome," like improving a process that is often costly and which condo developments must repeat every 24 months. The law lowers FHA's current owner-occupancy requirement (the number of units in the development owned by the people living in them) from 50 percent to 35 percent. The law likewise requires FHA to replace existing policy on transfer fees with the less-restrictive model already in place at the Federal Housing Finance Agency.
Additionally, the bill streamlines the process for exemptions to FHA's rule requiring that condominium projects have no more than 25 percent of the space dedicated to commercial use. This effort is in line with HUD's initiative to promote neighborhoods with a mix of residential housing, businesses, and access to public transportation, which has become a trend in housing development today.
Finally, H.R. 3700 includes further support for rural housing loans and multifamily housing initiatives.
"Realtors actively reached out to their Senators and Representatives to remind these officials of how important the issues are to homeownership. The new law will bring much needed relief to home buyers, especially first-time and low-to-moderate income home buyers, who have had a difficult time obtaining condominium financing, " said Karen Trolan, president of the Silicon Valley Association of Realtors.
The bill was strongly supported by the real estate industry and a broad coalition of more than 40 housing and advocacy groups.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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