The National Association of REALTORS® is celebrating a long-sought victory, calling the Senate’s latest action a “significant step” toward eliminating barriers to safe, affordable mortgage credit for condos.
On Thursday night the U.S. Senate unanimously passed H.R. 3700, the “Housing Opportunity Through Modernization Act,” which includes reforms to current Federal Housing Administration restrictions on condominium financing, among other provisions. The legislation has long been supported by NAR.
The changes are expected to make FHA’s recertification process “substantially less burdensome” and will lower FHA’s owner-occupancy requirement from 50 percent to 35 percent, NAR reports. 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.
“Condominiums often represent an affordable option that’s just right for first-time and low-to-moderate income home buyers,” says Tom Salomone, NAR’s president. “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.”
Many would-be home buyers have been hampered recently by tight housing inventories, rising home prices, and strict mortgage credit underwriting guidelines. This legislation, Salomone says, will offer a clear path for well-qualified borrowers to purchase a home when they’re ready.
More than 100,000 REALTORS® responded to a call for action from NAR. Sen. Tim Scott (R-S.C.) and Sen. Robert Menendez (D-N.J.) co-sponsored the legislation. Rep. Blaine Luetkemeyer (R-Mo.) and Rep. Emanuel Cleaver (D-Mo.) co-sponsored the House version, which passed Feb. 2. President Obama is expected to sign the bill.
“We look forward to seeing this legislation signed into law so home buyers can start seeing some much-needed relief,” Salomone says.
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