The U.S. Senate passed S. 3083 without objection, sending the Housing Opportunity Through Modernization Act to the President’s desk for his signature. Without you, the REALTOR® members, this huge success would not have been possible. First time homebuyers, thanks to your efforts, will now have a greater chance of reaching the American dream of homeownership.
Introduced by Sen. Robert Menendez (NJ), S. 3083 solved a number of concerns with the Federal Housing Administration’s (FHA) condo rules while also increasing access to rural housing loans for deserving families and improving federally assisted housing programs to make them easier to use for landlords and residents.
The reality is many first time homebuyers turn to condominiums as a more affordable option for homeownership. Condominiums make up about nine percent of the housing stock, but their share of the FHA portfolio is only 4.1 percent. Current FHA condo lending rules restrict the number of condos available to FHA homebuyers, thus limiting what is often the most affordable, appropriate choice for many families. Today, less than 10 percent of all condos have FHA approval.
Current FHA rules require that 50 percent of condo units be owner occupied. Freddie Mac and Fannie Mae have no such restriction when the home is being purchased as a principal residence, which all FHA borrowers are required to be. S. 3083 reduced the owner occupancy requirement ratio from 50 to 35 percent. The legislation also streamlined the FHA condo recertification process, offering more flexibility for mixed use developments, a type of development becoming increasingly popular nationwide.
Beyond condos, the bill provided a much better process for Rural Housing Service (RHS) loans and federal assisted housing programs. Many rural Americans rely on the 502 Rural Housing Guaranteed Loan Program to provide them with access to affordable mortgage credit. These loans are self-funded and budget neutral, meaning the fees paid by borrowers fully pay for the program. Additionally, easing burdens for federally assisted properties will improve access to affordable rental housing.
The House version of S. 3083 (H.R. 3700) passed the House 427-0 with no objection. Because of your efforts the same unanimous support was echoed by the U.S. Senate and S. 3083 will soon be law. Thank you again for acting on the recent Call for Action. The National Association of REALTORS® and the San Antonio Board of REALTORS®, not to mention property owner across the nation, are better off today because of your involvement.