Condominium Homeownership Opportunities Could Be Increased
CED-78-71: Published: Mar 21, 1978. Publicly Released: Mar 21, 1978.
- Full Report:
The growth in condominium ownership and its advantages have led to the enactment of legislation authorizing condominium financing programs for the Department of Housing and Urban Development (HUD), the Veterans Administration (VA), and the Farmers Home Administration (FmHA).
Because of statutory limitations, opportunities for financing are still not readily available to condominium buyers. HUD can only insure mortgages on individual condominium units if it had insured the mortgage on the entire project. This requirement eliminates 97 percent of existing condominiums from HUD's mortgage insurance program. The VA cannot guarantee condominium mortgages if the unit was not originally built and sold as a condominium. Before HUD insures or the VA guarantees a mortgage for a condominium unit, the developer or unit owner must submit separate legal documents to each agency for review. Standardizing legal requirements and agreeing to accept each other's review and approval would increase the number of condominiums approved and eliminate duplication. HUD and VA should do more to inform condominium homeowners of the advantages of obtaining Federal project approval and how to qualify for Federal condominium programs.
Matter for Congressional Consideration
Comments: Please call 202/512-6100 for additional information.
Matter: Congress should authorize: HUD insurance of mortgages on individual condominium homes without requiring that the project be built under a HUD program; and VA guarantee of loans on individual condominiums not originally built or sold as such. Congress should require the Secretary of HUD and the Administrator of Veterans' Affairs to: standardize legal document requirements so that sellers can readily offer their condominiums under more than one Federal program; and accept, without review, condominium legal documents approved by the other agency. The Secretary of HUD and the Administrator of Veterans' Affairs should conduct a joint outreach program to advise condominium associations of opportunities for potential buyers to obtain federally backed loans and criteria and procedures to qualify condominium projects for Federal programs.