09/06/2016 by Deborah M. Casey & Jeremy R. Moss
Since 2009, condominium associations have raised concerns about changes to the Federal Housing Administration (FHA) project approval requirements and the number of condominium associations eligible and applying for FHA approval have dropped significant. In response to those concerns, the Housing Opportunity Through Modernization Act (HOTMA) was unanimously approved in the U.S. House of Representatives and Senate and signed into law by President Obama on July 29, 2016. The full text of the bill is available here.
Among other things, HOTMA requires FHA to:
- modify its certification requirements to make recertifications substantially less burdensome than original certifications,
- consider lengthening the time between certifications,
- allow information to be updated rather than resubmitted for recertifications,
- allow private transfer fee covenants in the same manner as Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac), and,
- streamline the process for exemptions to FHA’s rule on commercial space.
FHA has 90 days from July 29, 2016 to provide guidance regarding the percentage of units that must be occupied by the owners or that percentage will default to 35% (down from 50%).
If you have questions about how HOTMA affects your association, or would like assistance in the FHA application process, please contact Deborah Casey, CCAL®.