Posted By Deborah Goonan
Commentary: Interesting new law in California. The video on FHA/VA loan shortages is particularly enlightening. The hope is that owners will pressure HOA Boards to work toward FHA and VA certification for their Associations.
Gov. Brown signs housing legislation aiming to increase affordable options for first-time and veteran homebuyers
AB 596 is the first-ever sponsored housing legislation by the Business Council as part of its initiative to provide an affordable range of housing to all Orange County residents
Orange County Business Council
Aug 13, 2015 2:15 PM
IRVINE, Calif., Aug. 13, 2015 (GLOBE NEWSWIRE) — Orange County Business Council (OCBC) is proud to announce today’s passage of AB 596, Common Interest Developments: Annual Report Budgets, as a step toward opening up more affordable housing options for California’s first-time and veteran homebuyers. The legislation, authored by Assembly member Tom Daly, requires an annual statement be provided to members of homeowners associations (HOA) regarding the status of its Federal Housing Administration (FHA) and Veteran (VA)-approved condominium project and whether that status changes.
California is consistently ranked as one of the most expensive places to live in the U.S., with high housing costs as a major factor. This is especially true in Orange County where median-priced homes start at $500,000 and require a minimum $80,000 salary. As many as 60 percent of first-time homebuyers plan to use an FHA/VA loan as the down payment required is considerably lower than that for a conventional loan. However, only 30 percent of the state’s estimated 28,000 condominium projects are FHA approved, and even fewer are VA approved—pricing many otherwise qualified homebuyers out of an already expensive market.
“California’s ability to supply housing to all socio-economic levels, from the hourly employee to the business executive, is a key factor in its ability to prosper economically,” said Lucy Dunn, president and CEO, Orange County Business Council. “By excluding first-time and veteran homebuyers from non-FHA/VA approved units, who would otherwise be qualified, we are systemically creating an even more unaffordable market for some of our brightest workers.”
The legislation does not require HOA’s to attain FHA/VA approval; however, requiring HOA’s to report approval status eases the process of those only looking to buy or sell with that criteria. Currently, HOA’s must reapply for FHA/VA-approval every two years. With transparent status updates, the legislation also aims to encourage more HOA’s to gain FHA/VA certification.
Developing a range of affordable housing options for all of Orange County’s residents is one of OCBC’s four-core initiatives to enhance the economic development and quality of life for the region. Passage of this legislation is one step in the right direction to creating a more affordable housing market, progress that was made in great part by the support and collaboration of OCBC member Orange County Association of Realtors (OCAR). To learn more about the FHA/VA loan shortage, watch a video produced by OCAR. To learn more about the state of workforce housing in Orange County, check out OCBC’s 2015 Orange County Workforce Housing Scorecard.
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