In a letter sent last week to Department of Housing and Urban Development Secretary Shaun Donovan, 69 members of Congress urge the housing agency to ease up on its rules regarding condo lending.
Among the specific rules under consideration, the congress members urge HUD to look at the rule on delinquent assets, onerous certification requirements, owner-occupancy requirements and commercial space.
With the current rule that not more than 15% of condo units are 30 days or more delinquent in their payment of assessments, the letter writes, the requirement does not take into consideration the overall health of the association, which could reverse those effects through reserves or other means.
Further, the letter stresses, applicants submitting for FHA approval must certify that the condo association complies with all local and state laws, yet very few legal professionals, let alone volunteer board members are willing to do so. The owner-occupancy requirement of 50% causes “significant problems” for owners wishing to sell their units, the letter states, and the FHA prohibition regarding a 25% cap on commercial space is “outdated and contrary to the “town center” model of planning.”
“We believe that by modifying its existing condominium policies FHA can better serve this important sector of the housing market,” the letter states.
View the letter via KSE Focus.
Written by Elizabeth Ecker
