While our Legislature and Governor are finishing this year's legislative session, we thought we would provide you some news from the Federal level. The Community Associations Institute reports that as the Federal Government continues its push to reform the mortgage finance system, CAI members should take comfort knowing that their efforts to shape the debate have started to bear fruit. In fact, members' efforts on two critical issues, the Federal Housing Administration condominium guidelines and the Federal Housing Finance Agency's private transfer fee regulation, have not only impacted the policy debate, they have made national headlines. Based on these early returns, CAI will continue to chalk up victories for all associations.
On the two biggest federal issues facing associations, CAI secured important victories. First, in March, FHA issued a waiver on rental restrictions. Originally, to qualify for FHA-backed mortgages, rules required that at least 50 percent of units in a condominium be owner occupied. FHA would have disqualified any association that adopted a rental restriction. Ironically, many condominiums put rental restrictions in place at FHA's urging years ago. CAI highlighted the inconsistency, and FHA issued a waiver, allowing condominiums with rental restrictions to qualify for financing.
Another important development critical to associations has been the issue of deed-based, private transfer fees. Last fall, the FHFA issued a craft regulation that would have effectively cut off any federally backed mortgages to properties with a deed-based transfer fee. FHFA was unaware that such fees have long been used by about half of all community associations to fund reserves, capitol projects and operations. If the FHFA proceeded, up to 11 million homes in community associations would have been unable to qualify for most mortgage products. Thanks to CAI member grassroots efforts, FHFA issued a revised draft of its proposal and addressed almost all of the issues raised by CAI members. Not only did FHFA publicly note the tremendous response from CAI members, but our grassroots efforts made the headlines in The Washington Post, which singled out CAI members' efforts as "swift and intense". CAI is currently submitting comments on the revised proposal.
In addition to these projects, CAI has made it easier to follow all the mortgage issues and changing rules. To keep our members engaged on the latest news, calls to action and impact of new regulations, CAI established the Mortgage Matters program. The program will provide members with updates on various federal mortgage issues. It is designed to provide a comprehensive view of federal regulatory and legal changes, and to offer members opportunities for education and input into our ongoing efforts.
As soon as the Florida Legislative session ends, the Governor signs or vetoes the bills, and we have the initial legal reviews, we will update everyone on this year's changes.