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Community Associations Institute (CAI) urges federal lending-related agencies and the secondary mortgage market to promote the availability of adequate financing programs for community association housing. CAI supports the development of consistent national legal and underwriting standards for community associations and reciprocal approval of community associations by federal agencies and the secondary mortgage market. To achieve these objectives:
There should be reciprocal approval of community associations by federal agencies and the secondary mortgage market.
Underwriting standards for lending in community associations should be based on industry recognized best practices.
Development of agency regulations governing lending in community associations should be done in a transparent manner with public notice and comment.
Adoption of uniform state legislation will facilitate the development of national financing programs.
Improved state enabling legislation or the adoption of uniform state enabling legislation should be pursued to enhance the feasibility and development of national financing programs, and that uniform regulations and standards by state housing finance agencies and other secondary mortgage markets should also be pursued.
Community association homeownership plays a significant role in meeting housing needs of Americans. However, for any form of housing to realize its full potential for growth and utilization, the full range of traditional sources of financing of development and sales, such as the Department of Veterans Affairs loan guarantees and Federal Housing Administration mortgage insurance, must be available to community association developments.
As community association housing represents more than twenty percent of all housing in the United States, regulatory and legislative efforts governing lending criteria to individuals or for housing in community associations should be informed by the unique, common ownership arrangements. Transparent and open rules or regulatory procedures that include public notice and comment are the best mechanism to ensure any rule adopted is based on the best information available to regulators.