HR3700-affected condo rules in 90-day comment period

New rules on condos affected by federal law must be eligible for the FHA

HR3700-affected condo rules in 90-day comment period
New rules on condominiums affected by HR3700 (The Housing Opportunity Through Modernization Act of 2016) that must make them eligible for the Federal Housing Administration insurance are now in the 90-day comment period, according to Mortgage News Daily.

"It is time to make a clear-eyed assessment of the risks and rewards that HR 3700 will bring," said Jacqueline Doty, CoreLogic vice president for product management and collateral risk in the current issue of MarketPulse. “Are the proposed rules being discussed during the current comment period the best way to do this?"

The Library of Congress’s summary on condominiums included in HR3700 dictates that certification requirements for mortgage insurance must be modified by the FHA ‘to make re-certifications substantially less burdensome than original certifications.’

Decisions must be made by HUD field offices on exemptions concerned with current FHA commercial space requirements; the FHA must adhere to standards of the Federal Housing Finance Agency on private transfer fee agreements currently applicable to condominiums suited for purchase or guarantee by Freddie Mac or Fannie Mae; and the FHA must also adhere to present FHFA rules on the percentage of owner-occupied units. The current standard of the FHA is 50%; GSEs only require 35%.