President Obama has recently signed HR 3700 and its Federal Housing Administration condominium reforms into law. These changes, when enacted after a 90-day grace period, will ease the FHA’s loan re-certification process, enact a less-restrictive model for transfer fees, and reduce the owner-occupancy requirement from 50% to 35%.
In response to these changes, CoreLogic’s Jacqueline Doty says that there is “no question” that easing the process of buying and selling condos, especially for low-income buyers and seniors, is a vital step. However, she raises concern about the overall lack of insight into the potential risks behind these new regulations, as well as a lack of approval standards across FHA condominium projects. She also believes that the re-approval of spot loans for FHA certified projects are not a financially stable option, and states that their re-instatement will increase the risk to the FHA insurance fund.