We did it! On Friday, July 29, 2016, President Obama signed into law the Housing Opportunity Through Modernization Act, also known as HR 3700. We couldn’t have done it without the hard work of our National Association of Realtors (NAR) Political Action Committee diligently pushing the bill through. Here’s what you need to know about HR 3700 and how it will impact your real estate business.
Introduced in October 2015, the legislation changes three areas of federal housing programs:
- The S. Department of Housing & Urban Development’s (HUD) rental assistance and public housing programs
- The Federal Housing Administration (FHA) requirements for condominium mortgage insurance
- The Department of Agriculture’s single-family housing guaranteed loan program
Why is this important to realtors and buyers? Well, for starters, it eases FHA regulations on loans made to condo buyers, which is great for you, as well as your clients. Under the old law, a condo development had to have a 50% owner occupancy rate (OOR, or ratio of owners living in a community compared to renters) in order to be eligible for FHA mortgage insurance. The new law reduces the owner occupancy ratio to 35%, giving our FHA buyers more inventory to choose from and facilitating homeownership for many more buyers.
The new law also benefits low-income households by increasing access to affordable rental housing and providing assistance to low-income renters. It allows the use of “project-based” housing vouchers for low-income tenants to more easily rent units in neighborhoods with low poverty and crime and well-performing schools.
Additionally, HR 3700 supports homeownership among low-and moderate-income buyers by changing rural housing loan guarantees administered by the USDA.
You can read the entire bill from Congress here.
Thanks again to all of those who worked had to get this measure passed. It is sure to help many future homeowners, which in turn will benefit your real estate business.