On February 5, 2016, the National Association of REALTORS® (NAR) reported that the US House of Representatives unanimously passed the “Housing Opportunities through Modernization Act” – also known as the “Condo Bill” – with a 427-0 vote!
The Act includes three major provisions supported by the REALTOR® association:
- The legislation solves a number of concerns regarding the Federal Housing Authority (FHA)’s condo rules:
- Reduces owner occupancy ratio to 35%.
- Directs FHA to streamline condo certification process.
- Provides more flexibility for mixed use buildings.
- Mirrors FHFA rules regarding private transfer fees.
- The legislation provides permanent authority for direct endorsement for approved lenders to approve Rural Housing Service loans.
- The legislation makes reforms to federally assisted rental housing programs to streamline the program.
The bill now moves to the Senate. If passed, it could clear the way to help more would-be home buyers purchase condos with FHA loans.
The FHA must approve a condominium project, based on certain criteria, to be insured by FHA loans. If the condominium project is not approved, an FHA loan cannot be used to purchase the property.
Currently, there are only 116 condominium projects in Maricopa County that are approved by the FHA. 26 of those are in Scottsdale.