The year 2016 was an eventful one for home building.
HUD/FHA Bureaucracy Stalling Condo Financing in Michigan
Implementation of a new federal law to assist stalled during transition between administrations in Washington.
A bureaucratic logjam at the Federal Housing Administration (FHA) has had the effect of denying a much-needed FHA loan option for Michigan consumers trying to sell or buy a site condo. Implementation of a new federal law requiring FHA loans be made available for site condos in Michigan appears stalled in the transition between administrations in Washington D.C.
“The failure of FHA to make these loans available is discriminating against consumers and builders in the state of Michigan,” said Robert Filka, CEO of the Michigan Association of Home Builders. “In these tight credit markets, having an FHA insured loan is an important option that makes it easier for a lender to package a favorable deal for consumers.” Michigan is the only state in the country that this delay is impacting (other states regulate site condos as single family homes).
Filka said that FHA staff developed a letter last November that would have allowed for FHA insured loans to be made available for site condos in Michigan. However, the Department of Housing and Urban Development (HUD) has not released the letter that gives guidance on how the new law allowing for FHA financing would be implemented.
MAHB has asked members of Michigan’s Congressional delegation to intervene.
“Michigan’s housing market can’t afford to wait any longer. Every lost sale because of this bureaucratic impasse threatens the livelihood of homeowners trying to sell and builders trying to survive. The message HUD is sending is Michigan doesn’t matter…that this is a one state issue that isn’t a priority. And, that is unconscionable,” said Filka.
The Michigan Association of Home Builders is a professional trade association comprised of 32 local homebuilder associations around the state and their builder, subcontractor and supplier members. MAHB works to positively promote the building industry and impact legislative, regulatory and legal issues affecting housing affordability.
More like this
- FHA raising mortgage insurance premiums up to 0.35 percent
- Lax Credit for Home Buyers as FHA-backed Insurance Premiums Decrease
- Big banks considering ending lending ties to FHA; could harm low-income borrower
- Ideas to help Millennials break into the tight housing market
- FHA’s Premium Reduction Attracted Millennial Homebuyers