Call Us: (248) 986-2290

      
 

Quick Update: Proposed Changes to FHA Condominium Project Approval Process

According to Community Associations Institute (“CAI”), a leading national community association organization, the U.S. House of Representatives will vote today on important changes to the Federal Housing Administration’s (“FHA”) condominium project approval process.  The changes to the FHA condominium project approval process are included in H.R. 3700, the “Housing Opportunity Through Modernization Act”, bipartisan legislation authored by Rep. Blaine Luetkemeyer (R-MO) and Rep. Emanuel Cleaver (D-MO).

CAI supports H.R. 3700 and has urged leaders of the House Financial Services Committee to bring the legislation to a vote in the full House of Representatives.  According to CAI, H.R. 3700 would make the following key changes to the existing FHA condominium project approval process:

  • FHA is required to revise condominium recertification requirements so that recertification is substantially less burdensome than initial project approval. FHA is required to consider lengthening the time of certifications and revising recertification procedures to be information updates rather than resubmitting the project for approval.
  • HUD field offices may, at the request of the submitting party, evaluate and grant exemptions to commercial space limitations and may take into consideration factors such as the number of housing units in a project as well as local economic conditions when evaluating exemption requests.
  • FHA is required to clarify permissible owner occupancy percentages for primary and secondary residences for project approval. If FHA fails to issue the required clarification within 90 days of enactment into law, the owner occupancy percentage for primary and secondary residences is established at 35 percent. FHA may establish different owner occupancy percentages based on local economic conditions.
  • FHA is required to follow Fannie Mae and Freddie Mac guidelines concerning transfer fees for condominium project approval and mortgage insurance.

Our office is following this potential development in the law.  Should you have any questions regarding FHA Certification, please contact our office.

UPDATE 2/3/16: H.R. 3700 passed the House yesterday and moved on to the Senate.  If you have any questions, our office is keeping track of this proposed legislation.

UPDATE 6/18/16: H.R. 3700 passed the Senate by unanimous vote and President Obama is expected to sign the bill into law.

The team at Hirzel Law, PLC is composed of award-winning real estate attorneys that can offer quality representation for Michigan clients. Regardless of if you are a commercial real estate developer or individual homeowner, our real estate attorneys can help. We fully understand how unique and complex the challenges that our clients may face, and our real estate attorneys are prepared to help in whatever way necessary. Contact Hirzel Law online or call 248-986-2921 (Farmington) or 231-486-5600 (Traverse City) or 616-319-9964 (Grand Rapids) to learn how our Michigan real estate lawyers can help protect your Michigan real estate investment today.

*For more information regarding this topic or more, CAI has excellent resources on its website.

Print Friendly, PDF & Email
Share Post
Written by

info@hirzellaw.com

No comments

Sorry, the comment form is closed at this time.

%d bloggers like this:

Hi

Ask us anything, or share you feedback