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The Federal Housing Finance Agency (FHFA) has issued a revised draft of their proposed regulation on deed-based transfer fees. Their revisions reflect the comments expressed by CAI and its members. CAI expressed strong concerns over FHFA’s assertion that such fees do not benefit community associations. The new draft proposal will be open for public comment for 60 days and CAI will follow up with a full analysis and sample comments.

In August of 2010, FHFA issued draft guidance which would have prohibited Fannie Mae and other mortgage finance entities from purchasing any mortgage for property with a deed-based transfer fee. FHFA included deed-based transfer fees charged community associations. Since nearly half of all community associations charge such fess, the proposal, if adopted, would have rendered up to 11 million homes in community associations unmarketable by cutting off most mortgage financing.

Responding to the challenge, CAI members assembled data on close to 1 million housing units in community associations across the country. The survey demonstrated that deed-based transfer fees are a common tool for funding association financial needs and directly benefit homeowners. In addition to the survey, CAI members across the country filed comments on the proposed guidance as well. While the regulatory process is not over and important work remains to be done, the revised draft issued by FHFA reflects nearly all the concerns expressed by CAI members including:


  • Recognition that deed-based transfer fees payable to associations benefit residents and support association finances;
  • Acknowledgement that association deed-based transfer fees should be exempt from any final regulation;
  • Requiring that any regulation adopted be subject to full public notice and comment;
  • A prospective application of any adopted regulation.


A copy of the FHFA announcement may be found here and the full, revised draft proposal may be found here. CAI will follow up in the coming days with a full analysis and action items to ensure that community associations will have access to deed-based transfer fees as a funding mechanism and still have access to mortgage financing to sell their homes. 


There remains much work to be done to protect community associations, but the revisions issued by FHFA show that the voice of community associations is being heard in Washington. Please look for follow up alerts in the coming days.


*These articles and related content on this website are provided without warranty of any kind and in no way constitute or provide legal advice. You are advised to contact an attorney in Association Management for legal advice related to your specific issue and community. Some articles are provided by third parties and online services. Display of these articles does in no way endorse the products or services of Community Association Management by the author(s).