New FHA Loans for Condos
New FHA Loan Guidelines For Condos
National Association of Realtors @, NAR, is celebrating another victory after the new FHA loan guidelines for condos passes the house legislation. The H.R. 3700, Housing Opportunities Through Modernization Act, is intended to ease up on stringent rules on FHA approved loans for condos as well as the new guide lines for FHA re-certification process for condominiums. The reform was necessary to streamline the condominium financing by reducing the restrictions that were in place on mortgages for the purchase of condominiums. The changes to recertification of condominium complex, which required a costly process every 2 years, was one of the most significant hurdles in purchase and finance of condominiums.
The reform is designed to allow more first time and lower priced home buyers to enter the market, which in return will promote the access to more affordable housing offered by many condominiums to home buyers. The H.R. 3700 passed the house and expected to be approved by the senate and eventually by President Obama. Realtors@ and NAR initiatives in promoting homeownership was a major force in introducing such legislation to the congress. In October of 2015, the NAR president, Chris Polychron testified and offerd his support for H.R. 3700, Housing Opportunities Through Modernization Act, before the US House Financial Services Subcommittee on Housing and Insurance. The support and efforts of NAR for changes in FHA guidelines proved to be a success when the US Congress put their stamp of approval on the new reform legislation.
The new guidelines will also lower the 50% requirement previously set for owner-occupancy to 35%, which while replacing their transfer fees policy with less restrictive model offered by Federal Housing Finance Agency. The H.R. 370 will give the potential purchasers of condos access to more affordable and flexible financing tools as well as wider selection of condominium units to purchase through approval of more condo development by FHA.