The National Association of Realtors and the American Land Title Association have been lobbying the federal government to eliminate private transfer fees. They’ve not got a proposal out for public comment with the Federal Housing Finance Agency to do just that.
But, the proposal may have some consequences beyond those desired by the Realtors and Title Agents. The wording of the proposal would also prevent community associations (also known as homeowners’ associations) from collecting fees when title to a property is transferred.
Many new housing-development projects come with not-for-profit homeowners associations that collect assessments from owners to fund community improvements and property management.
Some also receive covenanted transfer-fee payments to fund part of their work. Still others impose long-term transfer fees designed to benefit specific charities.
For example, Lennar, a homebuilder based in Miami, has imposed mandatory transfer fees on thousands of homes constructed in its California projects. – Seattle Times
If you are a homeowner in a community with an association that uses covenant based transfer fees as part of its funding you, or a potential buyer of your home, may not be able to obtain government backed mortgages under terms from Fannie Mae, Freddie Mac nor the FHA. With those funding sources being almost all of the available mortgages being offer, that would be an issue.