02 Feb Legislative Alert
|CAI GOVERNMENT AFFAIRS
On Tuesday, February 2, 2016, the U.S. House of Representatives will vote on important changes to the Federal Housing Administration’s (FHA) condominium project approval process.
The changes to the FHA condominium project approval process are included in H.R. 3700, the “Housing Opportunity Through Modernization Act”, bipartisan legislation authored by Rep. Blaine Luetkemeyer (R-MO) and Rep. Emanuel Cleaver (D-MO).
CAI supports H.R. 3700 and has urged leaders of the House Financial Services Committee to bring the legislation to a vote in the full House of Representatives.
H.R. 3700 makes the following key changes to the existing FHA condominium project approval process—
» FHA is required to revise condominium recertification requirements so that recertification is substantially less burdensome than initial project approval. FHA is required to consider lengthening the time of certifications and revising recertification procedures to be information updates rather than resubmitting the project for approval.
» HUD field offices may, at the request of the submitting party, evaluate and grant exemptions to commercial space limitations and may take into consideration factors such as the number of housing units in a project as well as local economic conditions when evaluating exemption requests.
» FHA is required to clarify permissible owner occupancy percentages for primary and secondary residences for project approval. If FHA fails to issue the required clarification within 90 days of enactment into law, the owner occupancy percentage for primary and secondary residences is established at 35 percent. FHA may establish different owner occupancy percentages based on local economic conditions.
» FHA is required to follow Fannie Mae and Freddie Mac guidelines concerning transfer fees for condominium project approval and mortgage insurance.