Policy changes

This year, the National Association of Realtors (NAR) was successful in getting the National Flood Insurance Program extended through September 30, 2017. This action will benefit approximately 21,000 communities required to have flood insurance and NAR also was able to have the practice of Realtors partnering with home-warranty firms.

 

Another change that occurred was that the FHA minimized the number of hurdles for financing condominiums. The FHA can now approve loans applications for condos in developments that have a maximum of 50% of its space designated for commercial use. The previous maximum was 25%. This will benefit mixed-use properties that have ground levels that are ideal for retailers and restaurants with higher floors suitable for residences.

The FHA made the following changes: Single investors can now purchase up to half the units in a development, an increase from 10% of a project. The FHA will now authorize loans on developments having 15% of homeowners who are 60 days or fewer late on their home association fees. Previously, this was a 30-day limit.

Also, to avoid the dilemma of condo board members not having knowledge or being unable to disclosure conditions or issues, the certification language has been relaxed. It now recognizes that condo board members make “good-faith efforts to verify condo information.”

It is anticipated that the FHA will make more changes regarding the purchase of condos. A big hurdle that still exists is the requirement that a minimum of 50% of the condos be occupied by owners. This presents a problem for buyers buying second homes that intend to rent when they are not there, and for investors wishing to also rent their units.

Another policy that is being targeted for change is the 50% FHA financing limit. At this time the FHA will not approve a homeowner loan for a condo if 50% of the units in a development have FHA financing.

In closing, the Chief Economist Lawrence Yun is fearing that there may be a housing shortage across many parts of the nation in coming months. The inventory of existing homes is at its lowest level in seven years while new home inventory is at its lowest level in 50 years.

As we enter the winter season, inventory will be less based on the trends of the past. Inventory is typically 15% lower in the winter than the summer. The inventory of distressed properties is also becoming less as there are fewer homeowners becoming serious delinquent. And when you consider those who lost homes and were displaced by Hurricane Sandy, there will be additional demand for homes in the Northeast as well.

Happy Thanksgiving!

 

Mary Ann Clark is a Realtor with Coldwell Banker at 177 West Putnam Avenue in Greenwich. Questions or comments may be e-mailed to [email protected] or she may be reached directly at 203-249-2244.

By participating in the comments section of this site you are agreeing to our Privacy Policy and User Agreement

© Hersam Acorn. All rights reserved. The Greenwich Post, 10 Corbin Drive, Floor 3, Darien, CT 06820

Designed by WPSHOWER

Powered by WordPress