Changes Coming in FHA Condominium Guidelines?
If you're a listener to "Condo and HOA Buzz" you heard over the past two weeks that Congress recently passed a bill that includes important provisions affecting all condominiums in the country. On February 2, 2016, HR 3700 was approved by the House of Representatives 427-0. The proposed law would streamline the FHA's certification requirements for condo projects, allow more commercial space in FHA-approved condo buildings, and relax current owner-occupancy requirements.
Specifically, under the Bill:
The FHA must issue guidance regarding the percentage of units that must be occupied by the owners (or sold to owners intending to meet such occupancy requirements) in order for a condominium to be eligible for FHA mortgage insurance. If the guidance is not issued within 90 days of enactment of this bill: (1) at least 35% of all family units must be occupied by the owners or sold to owners who intend to meet the occupancy requirement, and (2) the FHA may increase the requirement for a project on a project-by-project or regional basis after considering factors relating to the economy of the locality in which the project is located.
If the Senate joins, or passes a similar Bill, and the legislation becomes law, then it may mean that owner-occupier ratios could slip from the current level of 50.01% to 35%, a big win for condominium owners.
If you support this legislation, consider contacting your Congressman or Congresswoman. You can keep apprised of legislation affecting community associations at the national or local level through the Community Associations Institute's ("CAI") Advocacy resources here.
The team at Barker Martin actively advocates for our community association clients-in the legislative houses as well as the court houses. Feel free to contact us with any questions or comments on this, or any other current or proposed law.