On Sep. 26, FHFA proposed revisions re PTFC encumbered properties.
FHFA proposes amending regulation that restrict its entities from dealing in mortgages on properties which are encumbered by certain Private transfer fee covenants (PTFCs).
As well as from dealing in related securities, subject to certain exceptions.
Applies to the Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac), and the federal home loan banks (the banks).
Overview
Establish an additional exception to the restrictions for loans on properties with PTFCs.
The loans would have to meet certain shared equity loan program requirements for resale restriction programs in FHFA's duty to serve underserved markets regulation.
Provide ownership opportunities to very low-, low-, or moderate-income households.
Utilizes a ground lease, deed restriction, subordinate loan, or similar legal mechanism that includes provisions stating that the program will keep the home affordable.
Supports homebuyers and homeowners to promote sustainable homeownership, including reviewing and pre-approving refinances and home equity lines of credit.
Consultation
Comments on the proposed rule must be received on or before Nov. 27, 2023.
Mar. 2024 Fed Reg Rule Adoption
On Mar. 12, 2024, FHFA published adoption of rule in federal register, effective May 13.
As proposed, final rule established an additional exception that authorizes Enterprises and Banks to engage in such transactions if the loans meet program requirements.
In FHFA's Duty to serve regulation, without regard to any household income limit.
