Today we have some good news to report on how the domino effect will help real estate market here in SW Florida and nationwide.
For years Realtors have complained that financing was not as easy to obtain for condominiums as it is for single family homes. For various reasons FHA would not lend in most condo projects unless the association jumped through exhaustive and costly hoops. I’m sure FHA had good intentions and wants to protect consumers and the government, but the hoops were so burdensome and arduous that condos could only be financed by FNMA or Freddie Mac secured loans.
While FNMA has 3-5% down loans, many buyers prefer using FHA financing and were forced to buy single family homes under this program. This all changed now that H.R. 3700 was signed into law this past week. More than 140,000 Realtors lobbied Congress in support of this bill and it passed the House and Senate with Unanimous votes. Imagine getting anything done in Congress with unanimous votes!
Many argue that first time home buyers do well in condominiums because the budgeting for repairs, lawn, maintenance, roofs, etc are often times built-into the condo association fee. But you can see more about Faris Team and learn how homeowners are sometimes surprised by unexpected expenses that come with owning your own home. So this new law will really help spur first time home buyers to buy condos that are often times more affordable than single family homes.
Domino Effect Will Help Real Estate Market
What this legislation does is create a domino effect which could really help the real estate market. By opening up the condo market to more buyers you free up those current condo owners to sell and buy other things. And prices could go up as there will be more demand for condos going forward.
Getting more people into home ownership has its advantages, and financing is always key to providing a healthy real estate market and economy. What really hurt the real estate market and overall economy back in 2006-2011 was banks over-tightening lending practices.
Changes needed to be made because loans like the “Liar Loans” and no documentation loans that President Clinton initiated to open up financing to minorities created a monster and the real estate crisis. What started with good intentions led to everyone getting free money with no documentation and we all know what followed years later.
Now we have Dodd-Frank which is equally disastrous and overly regulatory and caused many homeowners to not be able to live the American dream. So wins like H.R. 3700 becoming law loom large and are good for the real estate market and economy.
If it were me I’d repeal Dodd-Frank but you can’t just undo that without having a plan in place. I’d also undo Obama Care, but again you can’t just undo something without having a better plan to go into place. Since I’m a nobody my ideas don’t matter. And some would argue they like Obama Care.
Where there seems to be unanimous agreement is in this bill, and to that end we’re all grateful. FHA’s owner-occupancy requirement has been cut from 50% to 35% and transfer fees will be more tolerated under this new law. These two new rules alone will open up more condos for financing, and the hoops they must jump through will be lessened.
If you’d like to search for condos in SW Florida, you can do so at www.LeeCountyOnline.com Or you can call us at 239-489-4042 and our team can help you decide whether a home or condo may be the best choice for you.
Good luck and Happy House Hunting!
We have 2 units for sale in Bella Casa in Fort Myers. Passing of this legislation could help home values in Bella Casa and other condominium projects across SW Florida.
Find out what your SW Florida home is worth online. If you’d like a more detailed analysis, please call us and we can help.