NAR: FHA Reforms Needed in Condo Financing
October 22, 2015
National Association of REALTORS® President Chris Polychron testified before a House subcommittee Wednesday in support of legislation that would help expand housing opportunities, stressing the need for reform of current Federal Housing Administration restrictions on condo financing.
Polychron spoke in support of H.R. 3700, the “Housing Opportunity Through Modernization Act of 2015,” before the U.S. Financial Services Subcommittee on Housing and Insurance.
Polychron told lawmakers that the reforms are crucial for making sure that qualified home buyers have access to financing.
“Condominiums are often the most affordable home ownership option for first-time buyers, small families, single people, urban residents, and older Americans.” Polychron testified. “Unfortunately, current FHA regulations prevent buyers from purchasing condominiums, harm home owners who need to sell their condominiums, and limit the ability of condominium projects to attract resident buyers.”
The proposed bill focuses on key areas that have been posing problems for buyers and sellers of condos, such as with FHA’s recertification process. Polychron said that the current FHA recertification process is often costly and that condo developments currently must repeat the process every 24 months.
Also, the legislation would lower FHA’s current owner-occupancy requirement from 50 percent to 35 percent. It would also require FHA to replace its policy on transfer fees with the Federal Housing Finance Agency’s less restrictive model. What’s more, the bill would streamline the exemptions process for FHA’s rule prohibiting certification of condo projects with more than 25 percent commercial space.
“H.R. 3700 includes changes to FHA policies that will give current owners and potential buyers of condos access to more flexible and affordable financing and a wider choice of approved condo developments,” Polychron said.
The bill also takes steps to support multifamily housing initiatives, including those of the Rural Housing Service and Section 8 Housing.
“This bill contains a number of provisions that NAR supports, and we believe it will help expand housing opportunities at all levels,” Polychron said.
Updated: May 18, 2019