On February 2, 2016, H.R. 3700, the “Housing Opportunity through Modernization Act” passed out of the U.S. House of Representatives and was referred to the U.S. Senate by a vote of 427-0. H.R. 3700 addresses problems with the current FHA condominium program. The bill directs the Secretary to streamline the project certification requirements so that recertifications are substantially less burdensome than certifications. The bill also directs the Secretary to consider lengthening the time between certifications for approved properties and allowing updating of information rather than resubmission.
In addition, H.R. 3700 addresses the following:
- Allows the Department of Housing and Urban Development (HUD) to grant exemptions to the requirements regarding the percentage of floor space of a condominium that may be used for nonresidential or commercial purposes
- Calls for FHA to adhere to the same requirements as Freddie Mac and Fannie Mae regarding mortgage insurance and private transfer fees
- Reduces the minimum owner occupancy requirement from 50% to 35%, but allows the Secretary to increase the percentage on a project-by-project basis or regional basis. However, if the Secretary does not issue guidance regarding increasing percentages within 90 days after the bill is enacted, the 35% guideline will apply.
Stay tuned for updates on H.R. 3700.