The Federal Housing Finance Agency ("FHFA") recently issued a proposed rule on private transfer fees that, if finalized, would prevent the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks from "dealing in mortgages on properties that are encumbered by private transfer fee covenants" ("Proposed Rule"). Private transfer fee covenants typically require that a developer be paid a transfer fee each time a property is resold. The Proposed Rule creates an exception for private transfer fees paid to homeowners’ associations, and other similar associations that are "used exclusively for the direct benefit of the real property encumbered by the private transfer fee covenant." In its current form, the Proposed Rule will apply to private transfer covenants created on or after the rule is published in the Federal Register. Regulated entities will have 120 days to comply.
The FHFA invites comments on the Proposed Rule, and any of the following means can be used to submit those comments:
- Email: Comments to Alfred M. Pollard, General Counsel, may be sent by e-mail to RegComments@fhfa.gov. Include "RIN 2590-AA41" in the subject line of the message.
- Federal eRulemaking Portal: Search for "RIN 2590-AA41", click on the search result and then click on the orange “submit comments.” If you submit your comments online, the FHFA suggests also submitting them via e-mail to ensure timely receipt.
- U.S. Mail, United Parcel Service, Federal Express, or Other Mail Service: The mailing address for comments is: Alfred M. Pollard, General Counsel, Attention: Comments/RIN 2590-AA41, Federal Housing Finance Agency, 1700 G Street, NW, Washington, DC 20552.
- Hand Delivered/Courier: The hand delivery address is: Alfred M. Pollard, General Counsel, Attention: Comments/RIN 2590-AA41, Federal Housing Finance Agency, 1700 G Street, NW, Washington, DC 20552. The package should be logged at the Guard's Desk, First Floor, on business days between 9 a.m. and 5 p.m.
We will continue to monitor developments on this topic and will provide updates as needed.