Everybody knows that congressional Democrats and Republicans can barely agree on anything. Yet in a rare and fleeting moment of unanimity in the House of Representatives, they recently approved legislation that could expand purchase prospects for thousands of people looking to buy their first home.
By a 427-0 vote, the House passed the Housing Opportunity Through Modernization Act, co-sponsored by Reps. Emanuel Cleaver II (D-Mo.) and Blaine Luetkemeyer (R-Mo.) Among other provisions, the bill would force the Federal Housing Administration to ease rules and restrictions that have essentially turned the agency’s once-vibrant condominium-unit financing program into a minefield for would-be purchasers, condo associations and lenders.
The FHA is the government’s principal agency for helping consumers buy affordable homes. It does not lend money itself but instead insures mortgages made by private lenders. FHA requires a down payment of as little as a 3.5 percent on loans it insures, allows more-flexible debt-to-income ratios than most other mortgage sources and tends to be more lenient on applicants’ past credit problems. As a result, FHA has long been the go-to mortgage source for young, first-time buyers, many of them minorities. The condo-unit financing program was especially attractive because in most markets condo units cost a median 20 percent to 30 percent less than single-family detached houses.