U.S. House Unanimously Passes Condo Bill

Smaller real estate investors who like the housing market -- rentals -- often look to purchase blocks of condominiums, or even single units, as part of their portfolio plan. Many of these acquisitions are all cash, but sometimes lenders are involved in these smaller transactions.

As such, there is looming good news for these investors. The House of Representatives passed, "Housing Opportunities through Modernization Act” with a unanimous vote of 427-0.  This legislation sponsored by Reps. Luetkemeyer (R-MO) and Cleaver (D-MO) includes three major provisions:

1. The legislation solves a number of concerns regarding FHA’s condo rules:
   • Reduces owner occupancy ratio to 35%.
   • Directs FHA to streamline condo certification process.
   • Provides more flexibility for mixed use buildings.
   • Mirrors FHFA rules regarding private transfer fees
2. The legislation provides permanent authority for direct endorsement for approved lenders to approve Rural Housing Service loans.
3. The legislation makes reforms to federally assisted rental housing programs to streamline the program.

The bill now moves to the United States Senate. Considering the momentum of this legislation through the U.S. House, it will likely be met favorably by Senators.

Stay tuned.