Senators on Thursday unanimously passed H.R. 3700, also known as the Housing Opportunity Through Modernization Act. Current rules disqualify buyers from seeking FHA loans if less than 50 percent of the condominium units are owner-occupied. The bill would lower that requirement to a 35 percent owner-occupied ratio.
H.R. 3700 also would compel FHA’s overseer, the U.S. Department of Housing and Urban Development, to rewrite its rules to make it easier to re-certify a condo building’s eligibility through an easier process. FHA also would have to relax a hard rule against allowing the condominium associations to collect transfer fees when a condo is sold. The agency would allow transfer fees that are used to support community improvements. That policy is consistent with Fannie Mae and Freddie Mac’s existing policy.
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