Community Associations Institute (CAI) is praising the Federal Housing Finance Administration (FHFA) for revising a proposed regulation that could have prevented potential homebuyers from securing mortgages for as many as 11 million U.S. homes.
CAI lobbied the FHFA to modify its initial proposal, which would have prevented Fannie Mae, Freddie Mac and other federal home loan banks from purchasing mortgages for homes in communities with deed-based transfer fees.
Although modified in a positive way, the draft regulation is still subject to change. The FHFA will accept comments on the latest draft for 60 days from the date of publication on February 1.
“CAI members and staff worked tirelessly to persuade the FHFA that traditional community association transfer fees should not be included in the regulation,” said CAI President Steven Y. Brumfield, CMCA, AMS, PCAM. “This is what an effective grassroots effort can accomplish and is the kind of advocacy that makes a real difference for associations across the country.”
Traditional community association transfer fees are based on contractual agreements in which new owners pay a fixed amount or small percentage of the sales price to the communities. Associations use these fees to support operations and fund essential, long-term maintenance and capital improvement projects.
Announced in the Federal Register February 1, the proposed regulation would still bar mortgage support for homes in associations where transfer fees do not benefit the association or, therefore, properties in the community.
“This was a critical revision for the financial health of tens of thousands of community associations,” said CAI Chief Executive Officer Thomas M. Skiba, CAE. “Protecting traditional transfer fees is beneficial to homeowners, potential homebuyers, the associations and the housing market. The government should avoid doing anything that could stifle home sales and put communities in further financial jeopardy.”
Added 2010 CAI President P. Michael Nagle, Esq.: "The exclusion of deed-based transfer fees that benefit community associations is a step in the right direction for associations and the still-stagnant housing market. We are pleased the voices of community associations and homeowners were heard. We hope this isn’t reversed before the regulation is finalized.”
According to the FHFA, Fannie Mae, Freddy Mac and 12 other federal home loan banks provide almost $6 trillion in funding for U.S. mortgage markets and financial institutions.
CAI is a 30,000-member, national association dedicated to fostering successful community and condominium associations. Working in partnership with 60 chapters, CAI advocates on behalf of associations and provides information, education and resources to associations and the professionals who support them. CAI’s mission is to inspire professionalism, effective leadership and responsible citizenship—ideals reflected in communities that are preferred places to call home. Visit www.caionline.org or call (888) 224-4321.