Las Vegas Market Watch
New Law Makes It Easier To Get A Condo Loan
The “Housing Opportunity Through Modernization Act of 2016” was signed into U.S. law on July 29, 2016. This is a relatively rare example of bipartisan cooperation on Capitol Hill: This legislation passed the House of Representatives in a 427-0 vote, and later passed the Senate by unanimous consent.
During the recession, many condo owners lost their home through foreclosure or short sale. Many of these condos were then purchased by investors, either through bulk sales or by individuals.
As a result, many condo developments had lower than 50 percent owner occupancy, and did not qualify for FHA mortgages. Buyers had to pay cash. Or, a higher down payment was required if the condo project even qualified for conventional financing. Both options were often out of reach for many first time buyers.
Unfortunately, overly burdensome restrictions on condo financing have for too long put that option out of reach for many creditworthy borrowers.
This new legislation lowers FHA’s current owner-occupancy requirement for condominium mortgage insurancefrom 50 percent to 35 percent.
According to the National Association of Realtors, condos often represent an affordable option that’s just right for first-time and low-to-moderate income home buyers.
Tight inventory and rising home prices are a reality of today’s market, and mortgage credit is hard to come by. This legislation helps clear the path for more well-qualified borrowers to purchase a home when they’re ready.
This law, which becomes effective in late October, puts the dream of home ownership back in reach for more Americans.
RSS FEED