Obama Signs Bill that Helps Condo Buyers
On August 2, 2016, President Obama signed H.R. 3700 into law. Also known as the “Housing Opportunity Through Modernization Act”, the law will encourage more condominium sales, particularly in Florida. First-time homebuyers will hopefully qualify for financing to purchase condominiums, and current condominium owners will be able to purchase a single family home.
The National Association of Realtors® (NAR) was pleased with the law, calling it a “significant step” in removing obstacles to obtain reasonable mortgages for condominiums. Furthermore, Tom Salomone, president of NAR and broker-owner of Real Estate II Inc., in Coral Springs, Florida stated, “This is a long-awaited victory for NAR and for homebuyers for whom condos are an important and affordable option.” NAR has been lobbying for the bill for quite some time and advised its Realtors throughout the country to urge their lawmakers to pass the bill. Previously, the U.S. House of Representatives had unanimously passed it and in late July, it was passed in the Senate.
The bill will ease the recertification process of the Federal Housing Administration (FHA), and ideally, will lower the FHA’s owner-occupancy condition from 50% to 35%. Also, the bill forces the FHA to exchange an existing policy on transfer fees with a model that is less limiting and has already been in place at the Federal Housing Finance Agency (FHFA).
This new law extends relief to well-qualified potential homebuyers who have been encountering difficult housing inventories, rising home prices and rigorous mortgage credit underwriting guidelines. Condominiums certainly are an affordable option and are perfect for first-time and low-to-moderate income homebuyers. In the past, burdensome restrictions on condominium financing have discouraged citizens from becoming first-time homeowners. This law places homeownership back in reach to many Floridians.