Homeowner Flood Insurance Affordability Act

The United States Senate has just passed "The Homeowner Flood Insurance Affordability Act" by a vote of 72-22 (both US Senator Nelson and Senator Rubio voted in favor of the bill. This is the bill the US House passed on March 4. This is incredible news for Florida REALTORS® and property owners. The bill will now be sent directly to President Obama for his signature!

* Reinstates Grandfathering - This bill permanently repeals Section 207 of the Biggert-Waters Act, meaning that grandfathering is reinstated. All post-FIRM properties built to code at the time of construction will have protection from rate spikes due to new mapping - for example, if you built to +2 Base Flood Elevation, you stay at +2, regardless of new maps. Also importantly, the grandfathering stays with the property, not the policy.

* Caps Annual Rate Increases at 18% - This bill decreases FEMA's authority to raise premiums. The bill prevents FEMA from increasing premiums within a single property class beyond a 15 percent average a year, with an individual cap of eighteen percent a year. Pre Biggert-Waters, the class average cap was 10%. Currently (Post Biggert-Waters), the class average cap is 20%. The bill also requires a 5% minimum annual increase on pre-FIRM primary residence policies that are not at full risk. The updated legislation also states that FEMA shall strive to minimize the number of policies with premium increases that exceed one percent of the total coverage of the policy (e.g., 1% of $250,000 = $2,500).

* Refunds policyholders who purchased pre-FIRM homes after Biggert-Waters (7/6/12) and were subsequently charged higher rates

* Permanently Removes the Sales Trigger - This bill removes the policy sales trigger, which allows a purchaser to take advantage of a phase in. The new purchaser is treated the same as the current property owner.

* Allows for Annual Surcharges - This legislation applies an annual surcharge of $25 for primary residences and $250 for second homes and businesses, until subsidized policies reach full risk rates. All revenue from these assessments would be placed in the NFIP reserve fund, which was established to ensure funds are available for meeting the expected future obligations of the NFIP.

* Funds the Affordability Study and Mandates Completion - This legislation funds the affordability study required by Biggert-Waters and mandates its completion in two years.

* Includes the Home Improvement Threshold - This bill returns the "substantial improvement threshold" (i.e. renovations and remodeling) to the historic 50% of a structure's fair market value level. Under Biggert-Waters, premium increases are triggered when the renovation investments meet 30% of the home's value.

* Additional provisions: This legislation includes several other provisions including preserving the basement exception, allowing for payments to be made in monthly installments, and reimbursing policy holders for successful map appeals.

House Flipping Opportunities are Back!

After the market declined, many investors found it very difficult to find flipping opportunities. Since home values had reduced by over 50% in many markets, investors were forced to rent their properties until the right time to sell returned.

ATTENTION Investors, release the property managers and hire me as your Realtor. Resale property inventory is extremely low and eager homes buyers are jumping at the chance to snatch turn-key homes within the first few days of being listed. Not only can you sell your rental inventory, there is still an opportunity to purchase distressed, fixer uppers at low price points, and remodel to sell at higher price points. Yes, that scenario I just explained is called Flipping.

Flipping is back. Only for a limited time, so take advantage while it lasts.

Buying a Duplex Within Sulphur Springs

The City of Tampa is requiring duplexes located within Sulphur Springs and have been vacant for more than six months to be converted into Single Family Homes. I discovered this information as one of my investors were hoping to add a few duplexes to his rental portfolio. Unfortunately, the duplexes he was hoping to purchase would need to be converted to single family homes. This would defeat the purpose of purchasing these properties and cut into his potential ROI.

If you are looking to purchase a duplex within the City of Tampa, I would advise that you check with the Tampa’s Code enforcement department to ensure that the property could be used as a duplex. So far, Sulphur Springs has the six month vacancy stipulation and I have not come across any other areas that enforces this stipulation.