Dear Friends:

     I have some very good news for you: We got the federal government to reverse its position on flip taxes.  We did it!

     I'm pleased to tell you that, this week, we succeeded in our effort to get the FHFA to change its mind.  The FHFA smartly decided to issue a much narrower proposed rule that would no longer threaten mortgages on properties that have flip taxes paid to co-ops, homeowner associations, and condominiums.  Because of our pressure, the FHFA changed course from its previous proposed restriction that would have prevented government-sponsored enterprises, such as Fannie Mae and Freddie Mac, from investing in any mortgage that contained a private transfer-fee covenant, even a co-op with a flip tax. 

     With the help of co-op owners across Queens and Nassau, we convinced the FHFA of the vital role that flip taxes play in maintaining and improving your properties.  So now, transfer fees that are used to directly benefit your properties are excluded from the proposed rule.  The regulation would generally define a direct benefit as including maintenance, improvements, and amenities that improve your property.  In addition, the proposed rule applies only to private-transfer fees created on or after the publication date of the proposed rule.  You can read FHFA's press release and its proposed rule on my website: http://ackerman.house.gov/uploads/fliptax.pdf

     I commend the FHFA for its reasonable decision to exclude co-ops, condos and other homeowner associations from its proposed rule.  If you would like to tell the FHFA that it made the right call, there's a 60-day comment period from the proposed rule's publishing date in the Federal Register, expected to be on or about February 7th. (Compliance with the rule is required within 120 days of publication.)  You may send your comments by email or regular mail.

          By email:
          Alfred M. Pollard, General Counsel at RegComments@fhfa.gov. 
          Please include "RIN 2590-AA41" in the subject line of your message. 

          By mail:
          Alfred M. Pollard, General Counsel
          Attention: Comments/RIN 2590-AA41
          Federal Housing Finance Agency
          1700 G Street, NW, Washington, DC 20552

     Please feel free to send me a copy of your comments, if you wish.

     I want to thank all of the co-op owners who contacted the FHFA and successfully persuaded the agency to change its previously misguided proposal.   

Sincerely,

Gary L. Ackerman