New Law Puts Homeownership in Reach for More Buyers
H.R. 3700 (also known as the Housing Opportunity Through Modernization Act) has been working its way up the ranks since February, when it passed through the House of Representatives with a unanimous vote. The senate echoed the House’s response in July, delivering its own unanimous vote and sending the bill to President Obama. Now, President Obama has signed the bill into law.
About the Bill
The Housing Opportunity Through Modernization Act seeks to provide more opportunities for housing to those for whom condominiums are a more feasible option utilizing low down-payment FHA financing. This group typically includes first-time homebuyers, single people, and small families with low/moderate incomes. The bill achieves this by presenting a list of modifications to be made to the Federal Housing Administration’s current restrictions concerning financing for condominiums.
Now that the bill has been signed by the President, the owner-occupancy requirement for a condominium building eligible for FHA financing will drop to 35 percent, having been 50 percent previously. Additionally, the cost associated with recertification of an FHA approved building (which must be completed every two years) will be significantly reduced. The FHA’s current framework for transfer fees will be replaced with a version used by the Federal Housing Finance Agency, which has proved to be less constrictive, meaning more flexibility and increased options for buyers.
A Major Victory
The new legislation is a major victory for prospective buyers and condo owners alike. The National Association of Realtors has proclaimed its support for the bill, and our team is following suit. The amendments to the FHA’s restrictions will open the doors to buyers who otherwise could not have qualified for financing, thus allowing them to achieve the dream of homeownership. It will also allow owners of condos to be more flexible when seeking out tenants. In short, it’s a win for everyone involved, real estate professionals included!