A draft rule has been issued by the Federal Housing Finance Agency for comment that would create serious problems for Co-op and Condo buyers. The rule would prohibit Fannie Mae from purchasing loans in buildings where there is a Transfer Tax/Flip Tax. We have spoken to Fannie Mae and have been informed that this is not the current policy, but the Regulators have recommended such a rule and on August 12th a draft was issued for public comment. The link below will give you the details of the proposed rule. We have been informed by Fannie that the primary intent of this proposed rule was not to have this apply to all Co-ops and Condos. Their primary intent is to stop developers from imposing 99 year covenants on new homes that require seller's to kick back a percentage of the sale price of the home to the developer when the home is sold. They are currently reviewi ng our concerns and will be back to us shortly, hopefully, with revised language that would correct this serious problem.
If their response does not assure us that the rule will be corrected, REBNY will be back to our members and ask that they join us in reaching out to our Congressional delegation. Please keep an eye out for our next update on this important issue.
Link to proposed Rule Change: http://www.fhfa.gov/webfiles/16480/PrivTransFeeGuidance081210.pdf
Steven Spinola
President