Special offer

Great news for Condo Sellers and Buyers!

By
Real Estate Agent with Remax First Realty II 0790808

If you're thinking about buying a condo but don't qualify for a conventional mortgage, the pool of condos available for FHA loans has just been increased. Previously, condo developments were required to have 50% owner occupancy in order for a new buyer to qualify for an FHA loan. Now, condo developments need only have a 35% owner occupancy rate.

 

On July 14, 2016, the US Senate passed H.R. 3700 the Housing Opportunity Through Modernization Act of 2016 by a unanimous vote.  The bill was passed by the House of Representatives in February of this year.  It has been sent to President Obama so that he can formally sign it into law.

So what does this bill do?  It contains reforms to restrictions on condominium financing as outlined by the Federal Housing Administration (FHA).  The bill will make the FHA's recertification process "substantially less burdensome."  A major change is reducing the FHA's owner-occupancy requirement from 50% to 35%.  

The bill has the backing from the National Association of Realtors, which had testified in support of the bill to the House.  The president of NAR Tom Salomone issued the following statement:

 "Condominiums often represent an affordable option that's just right for first-time and low-to-moderate income homebuyers. Unfortunately, overly-burdensome restrictions on condo financing have for too long put that option out of reach for many creditworthy borrowers.

"This legislation meets those restrictions head on, putting the dream of homeownership back in reach for more Americans.

"Tight inventory and rising home prices are a reality of today's market, and mortgage credit is hard to come by. We should take every opportunity to clear the path for well-qualified borrowers to purchase a home when they're ready, and this legislation does just that.

"Sens. Tim Scott (R-S.C.) and Robert Menendez (D-N.J.) have done tremendous work to see H.R. 3700 move forward, and we're thankful for their support. Realtors® made their voices heard as well, reaching out to their Senators and Representatives to remind them of how important this issue is to homeownership."

"We look forward to seeing this legislation signed into law so homebuyers can start seeing some much-needed relief."

So what does this mean? For one it makes more condo developments eligible for FHA financing.  That may translate to more first time home buyers being able to get a condo and stop paying rent.  

It also makes selling a condo much easier for current owners as now more condos will be FHA eligible.

That's a good thing. 

If you have any questions about this bill or want to get information on a condo or other property, contact Team Zuhl!

Posted by

 

 

 

~ Wayne & Jean 

Union County, NJ - a great place to live and work!

If you're looking to buy or sell a property in Union County, call us at 908-917-4189 or email TeamZuhl@gmail.com.

 

facebook  Pinterest  LinkedIn  Read Our Blog!

All opinions, information and data provided is deemed reliable but is subject to errors and omissions. Not intended to solicit other Brokers' clients. We cooperate with them fully. 

Comments (9)

Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

This should help a great deal, I will have to keep this in mind, as it has been the case that most of them don't qualify for FHA financing.

Jul 24, 2016 11:36 PM
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Thanks for sharinng this great news Wayne and Jean Marie Zuhl  !

Hopefully it will cover vacation condos as well.  Going to check with my Loan person to confirm and blog for my area as well - sending you a PM

Jul 24, 2016 11:57 PM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Wayne and Jean Marie Zuhl I am surprised more agents are not talking about this major change for FHA. Great post.

Jul 25, 2016 12:30 AM
Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

That is great news for people interested in obtaining a mortgage for a condo.  Thanks Wayne and Jean Marie Zuhl.

Jul 25, 2016 02:15 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Wayne and Jean - finally a bill that takes burdens away rather than adding them. Good news for condo buyers and sellers.

Jul 25, 2016 02:33 AM
Roy Kelley
Retired - Gaithersburg, MD

This is very good news to share.

Have a most productive summer.

Jul 25, 2016 11:20 PM
Rebecca Gaujot, Realtor®
Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

Wayne and Jean, this is indeed good news. ...now condo developents need only have a 35% occupancy rate... not 50%. Helps those buyers qualify for an FHA loan.

 

Jul 26, 2016 10:17 AM
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
Retired New Hampshire Home Stager

Great news to share....It should make it easier for many people.

Jul 26, 2016 10:51 PM
Claude Labbe
RLAH / @properties - Washington, DC
Realty for Your Busy Life

Every once in awhile, those people in Washington,DC do something smart.

Nice in that this time, it works out well for buyers, sellers, lenders, agents.

Aug 13, 2016 05:27 PM