Senators Scott, Menendez Lead Bipartisan Effort to Make Home Ownership More Attainable For American Families

Staff Report From South Carolina CEO

Thursday, June 14th, 2018

U.S. Senators Tim Scott (R-SC) and Bob Menendez (D-NJ) sent a letter to the Department of Housing and Urban Development Secretary Ben Carson urging him to issue a final rule that would help make condominium ownership a more feasible option for American families. According to statistics, condominiums remain one of the most attainable and affordable options for first-time homeowners, minorities, and older residents. The letter was signed by an additional 52 senators.  

In part, the Senators wrote: “…the Housing Opportunity Through Modernization Act was signed into law on July 29, 2016.  Section 301 of the statute makes a number of changes to the Federal Housing Administration’s condominium rules that would streamline and simplify requirements for condominium buildings to qualify for FHA approval…  Unfortunately, nearly two years later, the final rule has yet to be issued.  At a time when homeownership remains out of reach for far too many families, the FHA should expand affordable and sustainable access to home mortgage credit by issuing a final condominium rule.”

As an example of how condominiums offer a more affordable path to home ownership, in the Myrtle Beach, South Carolina area the average cost of a condo is 40 percent less than the cost of a single-family home. However, the current pace of the FHA’s approval process for condo applications for FHA insurance coverage has not kept up with demand. More than 80 percent of condos in consideration for FHA insurance coverage in South Carolina have outstanding applications. 

The letter continues to explain how the Department’s rule “will help stabilize condominium associations, ensure that homeowners will be able to sell their units more easily, and provide homebuyers more opportunities to buy affordable properties… When finalized, the rule will make it easier to finance condominium loans, while continuing to protect borrowers and maintain necessary safeguards to the FHA Mutual Mortgage Insurance Fund.”