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Even though President Trump never put Sharpie to paper, the 21st Century ROAD to Housing Act is now law.
The most sweeping federal housing legislation in a generation contains several components aimed at making home ownership more accessible to more people — one of the biggest being placing restrictions on single-family home purchases by investors.
“It will keep single family homes within reach of individual buyers rather than having these institutional corporate entities that invest and buy up the housing stock and turn those into rentals, which takes the inventory for individuals looking to purchase a home off the market,” says Norman Morris, CEO of Louisiana Realtors.
Those looking to buy their first home will soon have more options to choose from, because the new law also aims to spur construction of new homes of all price points.
“By increasing inventory into the marketplace, it’s going to only make those homes more available and affordable to not only a first-time home buyer, but individuals looking maybe to buy their second or third home,” Morris says.
Another component of the new law is a modernization of manufactured and modular housing requirements, which will greatly come in handy in a state like Louisiana.
“30% of new single family homes in Louisiana are manufactured or modular, one of the highest in the nation,” Morris points out. “And we’re home to roughly 260,000 manufactured and modular homes in our state.”
Morris says under the new law, it will be a lot easier, especially for first-time homebuyers, to obtain small-dollar mortgages.
“HUD will come in with some rules and regulations and expand their FHA-backed mortgages under $100,000, addressing a persistent lending gap in particularly the rural areas of the state,” Morris says.
Thanks to the new law, a single low appraisal will no longer put a purchase deal in immediate peril.
“It requires value reconsiderations and makes available second appraisal procedures, which aim to reduce deal delays and collapses in deals that maybe a home that had a single low appraisal can cause,” says Morris.
Morris notes that the effects of the new law will take some time to be fully felt.
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