What is the difference between a patio home, a townhome, a condo or a golf villa and does my property qualify to take advantage of H.R. 3700?
With the upcoming Housing Opportunity Through Modernization Act (H.R. 3700) coming into law it’s very important to have your eye on the right type of home if you want to capitalize on the changes and incentives introduced by this bill.
The unanimous vote on H.R. 3700 by the US House back in February and the Senate’s recent approval in July just made purchasing a condo much easier and more affordable.
For buyers purchasing a condo with FHA financing, the good news is some tough restrictions have been removed; H.R. 3700 requires the FHA to replace an existing policy on transfer fees with a less-restrictive model.
The Act also lowered the owner-occupancy requirement of a condominium project by 15%, from 50 percent to 35 percent, in qualifying communities. But the advantages are for buyers using conventional financing as well since this will loosen some of the strict mortgage credit underwriting guidelines for Fannie/Freddie mortgages.
What qualifies as a condo? Is your home considered a townhome, a patio home, a villa or a condo? The term seems to be used interchangeably in the real estate market in Arizona.
Well, HUD has a definition which can be found here, but the abbreviated version is a condo is an individually owned residential unit in a multi-unit project that may or may not be attached to one another but all unit owners belong to the same HOA.
Need some help determining if your property is a real condominium? No worries, there are several ways to go about it. You can locate the Legal Description in the county tax records, or contact the FHA to get the current status on the list of approved communities, or contact the HOA for a definitive answer or just contact The Matheson Team to do the legwork for you.
And there’s good news on the sellers side too! Once the bill is in effect there will be more qualified buyers to buy your condo when you go to sell.
It’s a win-win all the way around, for the condominium community, for the buyer and for the seller!