In addition to anticipated legislation on the state level to ban private transfer fees, a proposed regulation was issued on August 13, 2010 from the Federal Housing Finance Agency (FHFA). The proposal would prohibit FNMA, Freddie Mac and all federal home loan banks from purchasing mortgages for properties in communities with deed based transfer fees.
While the target of the regulation appears to be private transfer fees that require a payment to a third party each time a property is sold, the proposed rule would include deed-based transfer fees used by many community associations.
The impact of such a rule could mean many properties would be unmarketable because banks will likely not lend money on properties where the mortgage is not likely to be purchased by FNMA or Freddie Mac. The National Office of CAI has already communicated its immediate concerns to FHFA and will continue to do so. An update is available now, click here for article. It is our understanding that CAI will be seeking involvement in this crucial issue via surveys and direct interaction with FHFA, congressional representatives and state senators, so they in turn can put pressure on FHFA. Please look for information from CAI if you are a member, and we will forward it via this blog as well.