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FEE SIMPLE <br /> An issue brief by the Master Builders Association of King and Snohomish Counties ■ <br /> MASTER <br /> ASSOCIATION <br /> of king and Snohomish Counties <br /> BACKGROUND <br /> The Condominium Act, RCW 64.34, imposes restrictions on some attached and detached single family homes, <br /> such as townhomes,which make it difficult for builders and home buyers to obtain financing. For example, <br /> Fannie Mae and Freddie Mac mortgage requirements require the following: more than 50%of the condo units <br /> must be owner occupied, a minimum of 50%of the units in the project must be sold, and buyers with a down <br /> payment of less than 25% must pay an additional .75%of the loan amount at closing or pay a higher interest <br /> rate. Fee-simple ownership alleviates these restrictions and increases housing values. Fee-simple ownership <br /> enables the home owner to own the land, not just the air rights, while allowing development standards <br /> applicable to the parent site to still apply. By allowing attached and detached multifamily homes to be placed <br /> on fee-simple lots,the mortgage financing issues are eliminated, as the development,sale,and purchase of the <br /> unit will not fall under the condominium financing guidelines. <br /> SOLUTION <br /> Inform every local jurisdiction of the constraints imposed by the Condominium Association Act, and encourage <br /> the adoption of a fee-simple ordinance on a jurisdictional basis. <br /> BENEFIT <br /> Fee simple development does not trigger the additional and protracted insurance requirements association with <br /> the Condominium Association Act,and therefore have the following benefits <br /> • Encourage infill developments and reduce builder risks; <br /> • Provide viable alternatives for the entry level buyers to obtain home ownership; <br /> • Encourage the natural progression of buyers from apartments to attached and detached single family <br /> homes where equity can be built; <br /> • Markets to buyer preferences due to ownership of the land, not just the air space; <br /> • Increased home values due to land ownership; and <br /> • Alleviates the financial restrictions imposed by the Condominium Association Act. <br /> Master Builders Association of King and Snohomish Counties 335 116th Ave.SE,Bellevue,WA 98004 (425)451-7920 <br />