What you should know about upcoming FHA financing changes
06/22/2016 | Author: Editorial Staff
At National Association of REALTORS® legislative meetings last month, U.S. Housing and Urban Development Secretary Julián Castro announced that changes to FHA condo financing rules were out the door of his agency.
The new rules, hinted at when HUD announced temporary changes for FHA condo financing in November, are now at the Office of Management and Budget—the last stop before being published as a proposed rule and open for public comment. Details have yet to be announced, but the updates are expected to include changes to how student loan debt is considered for FHA financing as well as easing of restrictions on the amount of commercial space in eligible buildings and spot approvals. Allowing more commercial space in FHA eligible mixed-use developments would make it easier for those projects to fill their residential units. Spot approvals, which have been discontinued since 2010, would allow individual buyers to get FHA financing for units in buildings that have not applied to be certified by the agency.
The temporary rule changes announced in November include provisions that extend the definition of owner occupied units to second homes, simplify the recertification process for buildings, and ease insurance restrictions—all of which are expected to be addressed in the permanent rule change.
For now, the temporary rule changes are in effect, but new, sweeping updates to FHA condo financing are on the horizon. Updates to FHA rules for condo financing are also included in the Housing Opportunity Through Modernization Act of 2015, which has been passed by the U.S. House and has stalled in the Senate. Texas REALTORS® can contact Sens. John Cornyn and Ted Cruz to ask them to support the bill, H.R. 3700.
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