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FHA's Montgomery: Condo rule could be finalized this year
Federal Housing Administration (FHA) Commissioner Brian Montgomery indicated that the agency could finalize its rule to relax restrictions for agency-backed condominium loans yet this year. The FHA issued a proposed rule in 2016 to streamline the process and boost lending to first-time homebuyers.
The proposed rule suggested extending the recertification period for condo developments from one year to three and give flexibility to properties with commercial tenants. The FHA also sought comments on a new owner-occupancy level.
Montgomery also touched on concerns related to the mutual mortgage insurance fund, specifically losses to the fund as a result of Home Equity Conversion Mortgage (HECM) product. The FHA is expected to publish its 2018 report on the insurance fund next week. Montgomery stressed the need to modernize the agency's technology and data analysis to be on par with the sector and to effectively manage the risk exposure from the mutual mortgage insurance fund.
In addition, Montgomery said the Department of Housing and Urban Development (HUD) – which houses the FHA – is working with the Department of Justice (DOJ) on a Memorandum of Understanding related to the False Claims Act. He said he believed the current cap for fines for violations is too low.
Montgomery was speaking at a Women in Housing and Finance luncheon, attended by NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt, Regulatory Affairs Counsel Kaley Schafer, Regulatory and Legislative Assistant Sarah Jacobs and Associate Director of Media Relations and Communications Bobby Grant.
Jacobs will attend another Women in Housing and Finance event today, focused on duty to serve.