From my friend and attorney extraordinaire, Herman Thordsen:
Have you ever tried to get a loan on a condominium only to be frustrated when the loan was turned down because of problems with the condo project? If so, you’re not alone. But condo approvals just got a little easier.
On July 29, 2016 President Barack Obama signed into law HR 3700, the Housing Opportunity Through Modernization Act of 2016.
HR 3700 liberalizes condominium project lending eligibility guidelines. The CURRENT REQUIREMENT OF 50 PERCENT OF THE UNITS BEING OWNER-OCCUPIED WILL BE DECREASED TO 35 PERCENT, unless the HUD secretary acts within 90 days to decrease the current requirement.
The current maximum of 25 percent of “non-residential” space in mixed-use projects may be exceeded if an exception is granted, and the law requires the HUD secretary to create standards for exceptions and train staff accordingly.
HUD must simplify and ease the processing of renewal applications once a project is initially approved, and the HUD secretary is to consider lengthening the term of project approvals.
Associations still cannot have more than 15 percent of the members more than 60 days delinquent in assessments. At least 10 percent of the association budget must be placed into a reserve account. The association cannot be involved in a construction defect lawsuit, and must have fidelity insurance in place.
The project lending guidelines do not apply to detached condominiums, in which residences are not attached to any other residences. Those homes can be evaluated for lending on a unit-by-unit basis.
The association’s (and the board’s) basic responsibilities are to maintain and preserve common areas and comply with the law and governing documents.
For the complete detail go to HR 3700 at www.congress.gov (sdun81316)
THORDSEN LAW OFFICES
Herman Thordsen, Esq.* Direct Line-(714) 662-4993
Jozef G. Magyar, Esq.* Direct Line-(714) 662-4998
Sean Thordsen, Esq.** Direct Line-(714) 662-4995
* Licensed in California State and Federal Courts
** Licensed in California and Nevada State and Federal Courts
The views and opinions expressed herein are not necessarily those of Loanguide.com, C2 Financial Corp., or Casey Fleming.