Fannie Mae-No Politics (FNMA)

[navycmdr]

Fannie Mae Draws Fire for Rule on Short-Term Rentals

Monday July 12, 2021 - [e-mail]



Fannie Mae provoked a firestorm of criticism last October when it tightened the rules governing whether it will purchase mortgages from projects that include significant numbers of units available for short-term rentals. The response from lenders, real estate groups and homeowners associations — particularly those from resort communities with large numbers of investment properties and second homes — was so sharp that the Federal Housing Finance Agency in May issued a formal request for input on the topic.

A few days back, the comment period for that RFI ended, and it’s pretty clear that the critics are still angry.

The real estate industry was especially concerned and mounted an organized response to the controversial rule change. The National Association of Realtors led the way with a broadside complaining that Fannie’s new guidelines “blur the line between second homes and short-term rentals,” adding that the modified rules were likely to have a negative impact on the real estate market.

NAR noted several shortcomings in Fannie’s rules concerning so-called “condotels.” The trade group’s biggest complaint was that Fannie used “ambiguous and undefined language.” For example, the rule refers to “seasonal rentals” without explicitly defining what that means or how long an owner would have to live in a property.