Senior Partner Charlie Perkins would like our readers to be aware of the steps being taken by CAI’s Legislative Action Committee. They were presented by C. Scott Canady in the CAI Advocacy Blog on Devember 8, 2022 and are as follows:
CAI’s Federal Legislative Action Committee is carrying momentum from 2022 into the 118th Congress, which convenes in Washington, D.C., on Jan. 3. This past year saw important legislation introduced in Congress to help condominium homeowners finance major building repairs, a CAI-led coalition working to support mortgage credit for condominium and cooperative homeowners, and renewed interest in disaster assistance for community associations.
Safe Buildings & Safe Homes
Condominium building safety has been a primary focus of CAI members and the nation following the partial collapse of the Champlain Towers South condominium in Surfside, Fla., in June 2021. CAI’s advocacy work led to the introduction of two bills in the U.S. House of Representatives to ensure condominium homeowners and associations have access to financial resources for building repairs and rehabilitation.
- R. 8304, the Rapid Financing for Condominium Building Repairs Act, authorizes the Federal Housing Administration (FHA) to insure loans made by private lenders to condominium associations. FHA insurance will allow condominium associations to spread the expense of building repairs over 30 or more years.
- R. 5732, the Securing Access to Financing for External Repairs (SAFER) Act, will allow condominium homeowners to finance a building repair special assessment over 20 years through a second mortgage insured by the FHA or a new FHA-insured 30-year mortgage. Long-term financing is intended to reduce the financial strain of major building repairs on association households.
H.R. 8304 and H.R. 7532 are new pieces of legislation, and unlike state legislatures, it often takes years before Congress acts on new policy concepts. Building the case for new ideas in Washington, D.C., means going to other parts of the federal government and creating coalitions. CAI expects both bills to be introduced in the 118th Congress and will advocate for their enactment into law.
In late 2021, federal government mortgage companies Fannie Mae and Freddie Mac announced new rules for condominium and cooperative unit mortgages. The rules impact a large percentage of condominium associations and housing cooperatives as banks and other mortgage lenders must follow Fannie Mae and Freddie Mac rules for condominium unit mortgages and cooperative unit share loans.
As part of CAI’s 2022 Virtual Advocacy Summit in October, U.S. Rep. Lance Gooden (R-Texas) wrote to the Federal Housing Finance Agency (FHFA) expressing concern over condominium and cooperative mortgage rules. FHFA supervises Fannie Mae and Freddie Mac. FHFA Director Sandra Thompson responded to Gooden, acknowledging the new rules have caused confusion in the condominium and cooperative housing markets and indicated changes are in the works. Thompson’s letter states, “FHFA and (Fannie Mae and Freddie Mac) are working together to enhance and clarify questions … aimed at reducing confusion and liability concerns” in 2023.
Fairness in the distribution of federal disaster recovery resources has been a long-term priority for CAI. The federal LAC supports H.R. 5298, the Disaster Assistance Equity Act of 2022, which provides equal access to federal disaster recovery assistance for all association homeowners and residents.
H.R. 5298 allows local governments to remove debris from community associations following a major disaster in the same manner as non association neighborhoods. The bill also allows condominium and housing cooperative homeowners to use federal disaster assistance to repair critical building components in the same manner as single-family homeowners. If enacted, community associations and association homeowners will be treated in the same manner as all other communities and citizens following a disaster.
CAI members recently met with a key House committee to urge passage of H.R. 5298. While most legislative business has been concluded in Congress this year, CAI continues to press the case for disaster assistance in community associations and expects the legislation to be reintroduced in 2023.