July 29, 2016 – The White House announced President Barack Obama has signed H.R. 3700, the Housing Opportunity through Modernization Act. H.R. 3700 is now federal law.
H.R. 3700 reforms the process used by the Federal Housing Administration (FHA) to determine if condominium unit owners qualify for a mortgage with FHA insurance. FHA does not originate mortgage loans, but instead insures mortgages against default.
FHA-insured mortgages are widely used by first-time and minority homebuyers to purchase a home. In 2009, FHA changed its condominium qualification rules, leaving the majority of condominium homebuyers ineligible for FHA-insured mortgages. H.R. 3700, which CAI strongly supported, is expected to expand the number of condominiums where borrowers can use an FHA-insured mortgage to purchase a home.
“I congratulate Chairman Blaine Luetkemeyer, Ranking Member Emmanuel Cleaver, and the leadership of the House Financial Services Committee on the thoughtful, constructive, and inclusive process that produced H.R. 3700,” said Thomas M. Skiba, CAI’s Chief Executive Officer. “This bipartisan approach, furthered by Senator Tim Scott and Senator Bob Menendez, allowed H.R. 3700 to pass the Congress without a single dissenting vote.”
The FHA must now begin its implementation of H.R. 3700, which will involve changes to FHA regulations and existing agency guidelines. CAI’s Federal Legislative Action Committee will work with and on behalf of CAI members to urge that FHA move forward in a thoughtful and inclusive manner to fully implement H.R. 3700.
The legislative process is now over and H.R. 3700 is law of the land. Congress has clearly spoken, saying FHA’s current condominium recertification process is too burdensome and existing FHA rules on transfer fees must be changed. It’s time to roll up our sleeves and work in the same collaborative fashion that produced H.R. 3700 to ensure this law is fully implemented.