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  • Comment Detail

  • Date: 07/01/21
    First Name: Brad
    Last Name: Ward
    Email: bward@mirealtors.com
    Organization Type: state government
    Organization: Michigan Realtors Association

  • Comment

    Sandra Thompson
    Acting Director, Federal Housing Finance Agency
    Office of Housing and Regulatory Policy
    400 7th Street SW, 9th Floor
    Washington, DC 20219

    Dear Acting Director Thompson:

    Michigan Realtors® Association appreciates the opportunity to provide information and comments in response to the recent Request for Input on Short Term Rental Units in Condominium, Cooperative, and Planned Unit Development Projects. On October 7, 2020, Fannie Mae modified its lending rules to tighten parameters on whether or not the GSE will lend in properties with significant short-term rentals and hotel-like amenities, known as condo-tels. Michigan Realtors® has several concerns about these modifications to Fannie Mae’s condo-lending protocols, including:

    • The modified requirements contain ambiguous and undefined language that could complicate Fannie Mae’s designation process in Michigan. It complicates what constitutes “seasonal rental” and the time-period for which an owner needs to reside in the property. This is a major issue for Michigan’s important seasonal activities.
    • The modifications to the single-family guides will limit and restrict financing options for Michigan’s extremely large second home market. These also create complications to projects with high shares of second homes, even though these specific properties may have excellent underlying loan values.
    • Michigan faces a housing affordability and attainability issue. We worry that by leaving the determination of project eligibility and home investments up to lenders, who may lack the resources to review all relevant information related to the property, will impose further harm on potential buyers and the communities through inaccurate or incomplete eligibility determinations and unfair lending practices.
    • Condo boards and Homeowners Associations (HOAs) do not have a way to appeal Fannie Mae’s designation of their property, examine their lender review, or provide additional input that could change Fannie Mae’s decision or assessment of their project.
    • The State of Michigan has hundreds of popular vacation spots, many of which are home to vacation rentals and out-of-state 2nd homes. Implementing these modified requirements would jeopardize the balance of both equitable financing and the protection of an individual’s right to rent.

    Fannie Mae should carefully review all comments received in response to this RFI and make changes necessary to ensure these modifications help manage Fannie Mae’s portfolio risk without unduly harming the economies that rely on resort and second-home real estate activity.

    Sincerely,

    Brad Ward, Vice President of Government Relations and Legal Affairs