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The Federal Housing Finance Agency is moving ahead on a proposed rule to restrict government-sponsored enterprises Fannie Mae and Freddie Mac and the 12 Federal Home Loan Banks from investing in mortgages encumbered by private transfer fee covenants, says the National Association of Realtors.

NAR has long been vocal in its opposition to private transfer fees, which are often attached to a property by developers and require payment of fees back to the developer each time the property is resold; the covenants can be difficult to reverse and may be attached to a deed for up to 99 years.

“NAR commends FHFA for the proposed rule to ban private transfer fees, which we believe often decrease affordability, negatively impact equity and provide little benefit to property purchasers,” said NAR President Ron Phipps. “FHFA is taking the necessary steps to ensure that these fees are no longer used to simply generate revenue for investors and private developers.”

According to FHFA, the proposed rule would only apply to private transfer fee covenants created on or after the date of publication of the rule. Since there is virtually no oversight on where or how private transfer fee proceeds can be spent, on how long a private transfer fee may be imposed, or on how the fees should be disclosed to homebuyers, as many as 19 states have banned or restricted private transfer fees. The Federal Housing Administration has also restricted private transfer fees through its home loan programs.

Q: How many households pay more than half their income on rent?

A: An ominous report from the Department of Housing and Urban Development (HUD) reveals that 7.1 million households have been paying more than half their income for rent or have lived in substandard housing.

In a recent report to Congress, HUD found that “worst-case housing needs” grew by nearly 1.2 million households, or more than 20 percent, from 2007 to 2009 and by 42 percent since 2001. Worst-case housing needs are defined as low-income households who paid more than half their monthly income for rent, lived in severely substandard housing, or both.

HUD’s study — “Worst Case Housing Needs” — is one in a long-term series of reports designed to measure the scale of critical housing problems facing low-income unassisted American renting households. The findings are based on data from the U.S Census Bureau’s American Housing Survey conducted between May and September 2009. This report finds a direct link between the increased numbers of worst-case needs and the recent recession and related joblessness.

Jim Woodard writes for Creators Syndicate, creators.com.