GSEs Confirm Existing Policy on Interested Party Contributions, East Bay Flats Receives Tax Credit for Workforce Housing Development, and U.S. Supreme Court Upholds Private Property Rights in Second Ruling This Week
This past week, Fannie Mae and Freddie Mac explicitly confirmed that buyers whose agent is compensated by the seller will continue to have access to financing through those institutions. Next, we turn our attention to local workforce housing development East Bay Flats, which has received a Low-Income Housing Tax Credit. Lastly, the U.S. Supreme Court continues to uphold private property rights in a recent ruling.
1. GSEs Confirm Existing Policy on Interested Party Contributions
On Monday, April 15th both Fannie Mae and Freddie Mac published explicit confirmations that buyers, whose agent is compensated by the seller, will continue to have access to financing through those institutions. Furthermore, so long as it remains "customary" for the seller to pay commissions, those will not be added to the interest party contributions (IPC) and subject to the caps on IPCs.
Interpretation of this rule under the proposed settlement was of great concern. The National Association of REALTORS (NAR’s), in partnership with the Mortgage Bankers Association, wrote to Fannie Mae, Freddie Mac, and the FHA seeking confirmation that the FHA and GSE policy would continue to exclude seller or listing agent payment of buyer agents’ commission from IPCs. The FHA responded with a letter to the NAR published on March 28th where the FHA made the same confirmation (covered in the April 8th GAD Top 3).
Content shared by Brayton Farr with Genisys Mortgage Professionals
2. East Bay Flats Receives Tax Credit for Workforce Housing Development
East Bay Flats, a former hotel converted into apartments by Goodwill of Northern Michigan, has received a Low-Income Housing Tax Credit (LIHTC) for $788,000 in tax credits from the state. This allows Goodwill to claim a credit against their tax liability annually for up to 10 years. East Bay Flats has dedicated their apartments to workforce housing for tenants earning 80 percent or below of the area median income since 2019, Goodwill of Northern Michigan hopes to lock in some of the units for permanent supportive housing. Goodwill of Northern Michigan plans to eventually turn 33 of the 67 units into homes for people facing chronic homelessness, who have a documented disability or are fleeing domestic violence. This LIHTC will provide project-based vouchers to the building for tenants earning 60 percent of the area median income or less, currently $37,800 or less for one, according to the latest MSHDA limits. For more information on the East Bay Flats LIHTC tax credit, check out this article from IPR.
3. U.S. Supreme Court Upholds Private Property Rights in Second Ruling This Week
This past Tuesday, April 16th the U.S. Supreme Court issued its second unanimous ruling in as many weeks in the case of DeVillier v. Texas, the Supreme Court ruled in favor of property rights under the Constitution’s takings clause. The Constitution’s takings clause states that private property shall not be taken for public use without just compensation. The National Association of REALTORS® (NAR) joined the Texas REALTORS and American Property Owners Alliance in filing an amicus brief in support of the landowners in this case last year. For more details on the case, check out this article from NAR.
