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Minnesota Community Living 2013-03-04 The Road Ahead
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The Road Ahead

With a new Congress sworn in and the pageantry of President Obama’s inauguration passed, CAI is moving aggressively in Washington, DC, to make sure your voice is heard. The road ahead for CAI’s federal affairs agenda includes fairness in disaster recovery for community associations and preparing for the central role associations will play in new federal mortgage rules.

Fairness for Community Associations

Superstorm Sandy has shown once again how community associations are treated unfairly under federal disaster recovery guidelines. CAI has heard from hundreds of members whose communities were damaged by Superstorm Sandy but who have been denied federal disaster assistance.

Local governments have helped associations only to have FEMA refuse funding to offset these expenses. Cooperatives and condominiums have been ruled ineligible for help with uninsured damages.

In each case, federal disaster assistance was refused because the damages were in a community association. Tragically, FEMA would have helped these neighborhoods and homeowners if the loss occurred in a non-association community. It is unfair that associations are told to manage disaster recovery on their own.

CAI’s call for fairness in disaster assistance was joined by other organizations and has been heard by key leaders in Congress. CAI is working with New Jersey Senator Robert Menendez to persuade FEMA to reconsider its refusal to provide disaster assistance to community associations. New York Senator Charles Schumer has called on the federal government to provide grants to cooperatives and condominiums to help with disaster recovery.

Every CAI member can contribute to this effort by contacting their representatives in Congress to demand fair access to recovery resources for community associations. Ask your local and state officials to contact FEMA and urge that community associations receive fair treatment. By joining together, we can prevent community associations from having to go it alone in the next natural disaster.

Federal Mortgage Rules

In early January, the federal government released new mortgage lending guidelines. As expected, community associations will play an important role in the new mortgage approval process.

Lenders are now required to prove borrowers can make monthly principal and interest payments as well as monthly payments for insurance premiums, taxes, and association assessments. This "ability to repay” test protects borrowers and communities from the dangers of predatory lending.

Community associations should be prepared to provide lenders with information about regular and special assessments. This information is a critical part of the ability to repay test.

At CAI’s request, the federal government will allow lenders to use assessment information from other sources as long as the information is reasonably reliable. For example, a lender may rely on assessment information provided by the buyer or seller rather than the association. Also, associations need only provide information on current assessments.

Federal officials understand that community associations are a growing source of housing in America. Verifying that new homeowners have the ability to pay a fair share of association costs will lead to healthier, stronger, and more stable communities across the country.

The Road Ahead

For CAI, the road ahead in 2013 involves a broader federal agenda than fairness in disaster assistance and implementing new mortgage rules. Every CAI member is vital in driving this agenda as far down the road as we can. To learn more about CAI’s federal affairs agenda and how you can help, visit www.caionline.org or send an email to government@caionline.org.

Published by Community Associations Institute — Minnesota Chapter, copyright 2013. All articles and paid advertising represent the opinions of authors and advertisers and not necessarily the opinion of either Minnesota Community Living or CAI–Minnesota Chapter. The information contained within should not be construed as a recommendation for any course of action regarding financial, legal, accounting, or other professional services by the CAI–Minnesota Chapter, or by Minnesota Community Living, or its authors. Articles, letters to the editor, and advertising may be sent to Chapter Staff Editor Joe Flannigan at joef@cai-mn.com, or at CAI–Minnesota Chapter, 1000 Westgate Dr., Suite 252, St. Paul, MN 55114.

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