On July 29th, President Barack Obama signed HR 3700, the “Housing Opportunity Through Modernization Act of 2016,” into law. This law updated the current condominium project lending guidelines, relaxing those set in 2009 by the Federal Housing Administration and Fannie Mae, which projects had to meet in order to receive FHA or Fannie Mae loans.
Most condominium home owners’ associations did not meet these extensive standards, and disqualify many from loans to this day, according to OC Register columnist Kelly G. Richardson. Among the new standards included in HR 3700 are a minimum owner occupancy rate of 35%, rather than 50%, and the ability to grant an exception to non-residential space restrictions in a mixed-use development.
Condominium home owners’ associations are not legally obligated to meet these standards, and pursuing FHA/FNMA approval is not a requirement or priority, according to Richardson.