When H.R. 3700, the “Housing Opportunity Through Modernization Act,” was signed into law earlier this year, the Department of Housing and Urban Development was given notice that they had 90 days to weigh in on regulations related to Federal Housing Administration financing for condominiums before changes automatically went into effect. These included rules regarding owner-occupancy rates and treatment of spot loans, among others.
In response to H.R. 3700, HUD released a proposed rule on September 27 that includes positive changes, like a return of spot loans and an extension of the certification period, but also includes a proposal to set owner-occupancy rate requirements within a range of 25 percent to 75 percent. This is despite a 35 percent requirement laid out in H.R. 3700.
The National Association of Realtors® praised sections of the rule, but remains concerned about the possibility of an overly high owner-occupancy threshold. NAR cited estimates showing that that less than 10 percent of all condos are FHA certified as evidence that more needs to be done. NAR President Tom Salomone expressed disappointment that HUD chose to defer the owner-occupancy decision, but said Realtors® will work with HUD directly and through comment to establish a data-driven threshold.
Read HUD’s press release on the topic here: http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2016/HUDNo_16-146
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