HOAleader.com - Tip of the Week - September 9, 2016
Published: Fri, 09/09/16
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New Law Simplifies FHA Condo Certification
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In this week’s tip, we report on a new law signed by President Obama in late July easing restrictions on condos seeking to qualify for Federal Housing Administration-guaranteed financing.
In case you’re new to the issue of FHA certification, here’s a quick rundown. The FHA guarantees home loans offered through conventional lenders, making the loans more appealing to buyers. The loans typically require less of a down payment and offer more liberal credit-score minimums for buyers than non-FHA mortgages.
What’s this got to do with your condo association? If your association doesn’t qualify for FHA financing, buyers with more limited financing options may not be able to purchase in your community.
The rub is that FHA certification has been exceptionally rigorous.
In 2009, the FHA tightened its rules governing condo association certification. In 2012, after years of complaints, it loosened them up a bit. For instance, instead of the requirement that no more than 15 percent of units be delinquent for more than 30 days, the 2012 updates said no more than 15 percent of units could be more than 60 days in arrears.
The updates also permitted investors to own up to 50 percent of the units and permitted the percentage of total commercial space allowed in a project to reach 25 percent.
H.R. 3700, the Housing Opportunity Through Modernization Act, eases the FHA certification process even further. “Many changes were made for the benefit of borrowers—especially those purchasing a home for the first time and for seniors who desired reverse-mortgages,” notes Lisa Magill, of counsel at Kaye, Bender & Rembaum in Pompano Beach, Fla., who advises Florida community associations.
The new law lowers the owner-occupancy requirement to 35 percent owners, with the remaining units permitted to be investor-owned. “Homes are now considered owner-occupied if they’re the primary or secondary—seasonal—residence of the owner,” notes Magill. “This is helpful in places like Florida, where many homes aren’t considered the owner’s primary residence.”
There’s also a general call to the HUD secretary to streamline the certification requirements so recertifications are substantially less burdensome than certifications. It also calls on the secretary to consider lengthening the time between certifications for approved properties and allowing updating of information rather than resubmission.
Read all the other updates in the law--and why they may not be a good thing for condo associations--in our new article: http://www.hoaleader.com/members/1428.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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New Law Simplifies FHA Condo Certification
In this week's tip, we report on a new law signed by President Obama in late July easing restrictions on condos seeking to qualify for Federal Housing Administration-guaranteed financing. In case you're new to the issue of FHA certification, here's a quick rundown. The FHA guarantees home loans offered through conventional lenders, making the loans more appealing to buyers. The loans typically require less of a down payment and offer more liberal credit-score minimums for buyers than non-FHA mortgages.
Click here to read full article: http://www.hoaleader.com/public/New-Law-Simplifies-FHA-Condo-Certification.cfm
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What You Need to Know about the FHA's New Condo Regs
In late July, President Obama signed a law easing restrictions on condos seeking to qualify for Federal Housing Administration-guaranteed financing. Here's a rundown of what this means for your condo association.
Click here to read full article: http://www.hoaleader.com/members/What-You-Need-Know-about-FHAs-New-Condo-Regs.cfm
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Chicago Condo Sues Over Short-Term Rentals
In this week's tip, we tell Chicago that, with all your wonderful qualities, you're a little behind other cities when it comes to going after short-term rentals. A Chicago condo board has filed a lawsuit seeking to evict a tenant who has over and over violated the condo's short-term rental policies. The condo board has repeatedly fined the owner, but now it wants the tenant out. A Chicago lawyer says this is the first time he's seen a condo sue over short-term rentals, reporting that fining has typically fixed the problem.
Click here to read full article: http://www.hoaleader.com/public/Chicago-Condo-Sues-Over-Short-Term-Rentals.cfm
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A New Twist on Short-Term Rentals? Condo Sues Tenant, Owner
A Chicago condo board has filed a lawsuit seeking to evict a tenant who has over and over violated the condo's short-term rental policies. The condo board has repeatedly fined the owner, but now it wants the tenant out. A Chicago lawyer says this is the first time he's seen a condo sue over short-term rentals, reporting that fining has typically fixed the problem.
Click here to read full article: http://www.hoaleader.com/members/New-Twist-on-ShortTerm-Rentals-Condo-Sues-Tenant-Owner.cfm
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HOA Reserves and Other Funding Options: How to Be a Smart HOA Money Manager
The more you know about how to fund your operations, the more confident you'll feel responding to owners who question your financial wisdom. Build that knowledge by joining a one-hour webinar on September 29 led by two community association experts. They'll explain what you need to know about HOA reserves and other funding mechanisms. They'll also reveal the smartest moves you can make to ensure your HOA can pay for needed maintenance and repair projects, and even community upgrades.
Click here to read full article: http://www.hoaleader.com/products/how-to-be-smart-hoa-money-manager-a.cfm
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