The Washington Report

In This Issue
Environment Report
Lead Paint Renovation Compliance Guide Now Available On-Line

Housing Report
NAR Calls for Enhancements to New FHA Condominium Rules
NAR Responds to FHFA Guidance on HVCC

Lead Paint Renovation Compliance Guide Now Available On-Line

This compliance guide provides information for REALTORS� and property managers on the EPA's new Renovation, Repair and Painting Rule. The guide describes the new lead-based paint safety practices established by the rule, and what steps REALTORS� and property managers need to take to comply with the new procedures.

The guide includes a short introduction, two narrated presentations, and two sets of frequently asked questions (FAQ) answered by EPA officials and regulatory experts--one video each for REALTORS� and property managers.

Visit the guide at www.realtor.org/leadpaint

Russell Riggs 202-383-1259

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NAR Calls for Enhancements to New FHA Condominium Rules

On July 31, 2009, NAR President Charles McMillan sent a letter to FHA Commissioner David Stevens calling for enhancements to recently announced Mortgagee Letter 2009-19, Condominium Approval Process – Single Family Housing. In the letter, NAR applauds FHA for reducing the owner-occupancy requirement from 51 percent to 50 percent but argues this reduction is not sufficient. NAR recommends that FHA adopt a policy similar to government sponsored enterprises, Fannie Mae and Freddie Mac, where there is no owner-occupancy requirement if the borrower is going to occupy the unit after purchase. NAR also recommends increasing or temprorarily suspending the FHA concentration requirement, reducing or elminiating the requirement that 50 percent of units must be sold prior to FHA insuring a mortgage in the project, and clarification on the reserve study requirement.

NAR believes that enhancements to the mortgagee letter will help stabilize many condominium projects and benefit all stakeholders in the real estate transaction. Lenders will have the opportunity to move REO properties off their books because more units could be eligible for buyers with FHA mortgages. Individuals and families purchasing units in these developments with FHA loans will have access to more flexible and affordable financing opportunities. Potential buyers with FHA mortgages will have a wider choice of condominium developments. Finally, existing owners in these developments benefit as vacant units are purchased and occupied and the owner-occupied ratio increases.

NAR Letter to FHA on New Condo Rules
Mortgagee Letter 2009-19: Condominium Approval Process – Single Family Housing

Jerome Nagy 202-383-1233, Megan Booth 202-383-1222

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NAR Responds to FHFA Guidance on HVCC

On August 4, 2009, NAR President Charles McMillan sent a letter to Federal Housing Finance Agency (FHFA) Director James Lockhart addressing the agency's recent guidance on the Home Valuation Code of Conduct (HVCC). The Guidance states that HVCC should mitigate controversy by increasing protection for appraisers. In the letter, Mr. McMillan applauds FHFA for its efforts to address misinformation surround the Code but disagrees that the HVCC is appropriately dealing with the controversy surrounding the appraisal process.

NAR cites survey data that seems to indicate that the Code is creating negative unintended consequences. "According to a survey of our members, 76 percent of respondents said the length of time to obtain a completed appraisal report increased after May 1, 2009. More than one third of REALTORS® have lost at least one sale because of a delay in the appraisal process. At the same time, respondents who identified themselves as appraisers said their time frame to submit an appraisal report has decreased and half of these respondents say this impacts the quality of the appraisal report." At the same time, the cost to the consumer is increasing.

NAR Letter to FHFA on HVCC Clarification
FHFA Guidance on HVCC
NAR's HVCC Web Page

Jerome Nagy 202-383-1233

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Last Updated: 08/07/2009 Bira de Aquino