A new federal law is aimed at making homeownership more accessible in Louisiana by increasing housing inventory, expanding loan options and placing new limits on corporate real estate investors.
The 21st Century Road to Housing Act includes four main provisions, according to Norman Morris, CEO of Louisiana Realtors.
"The four main features of the new law — we believe, over time, [it will] increase construction of new homes, it will expand the path to home ownership, it modernizes the manufactured housing and modular housing industry and business in Louisiana, and it keeps single-family homes within reach of Louisiana buyers rather than large institutional investors," Morris said.
Corporate investor limits and inventory
Under the new law, corporate real estate buyers are limited to purchasing no more than 350 housing units at a time.
Morris said the regulation is expected to return inventory to the market over time.
"I think this legislation will help over a period of time with adding inventory back into the marketplace, which gives buyers obviously much more of an opportunity to be able to look at all types of properties and increase their chances of buying property in the state with more inventory," Morris said.
Additional provisions
Other components of the law include:
- Federal Housing Administration funding for borrowers taking out loans of $100,000 or less, which Morris said is particularly beneficial for rural areas
- Expanded VA loan options
- Incentives for local governments to convert vacant downtown buildings into housing
- Additional financing programs for manufactured and modular homes
Limitations and outlook
Morris said the law is not a complete solution to housing affordability challenges.
"Obviously, you know, it's not a silver bullet. There are more things that we have to do in terms of the insurance and other costs that individuals have today with the increased inflation costs and also, obviously, with hopefully getting the interest rates down even further, as I said earlier, below 6%, and we hope it ends up at 5.5% or even lower," Morris said.
Full implementation of the new programs and regulations is expected to take time. Morris said he hopes to see the law's impact within the next year or so.
