Chicago Prohibited From Collecting Fannie, Freddie Transfer Taxes
October 14, 2016
A judge ruled that the city of Chicago cannot impose a real estate transfer tax on buyers who purchased homes sold by the GSEs. Even though federal law does not allow local governments to collect taxes to property held by federal lenders, the GSE accused the city of circumventing the law by waiting for properties to be sold then sending the buyers a tax bill. This ruling stems from a federal court case last October in which Fannie Mae and the Federal Housing Finance Agency sued the city for trying to collect taxes from buyers who purchased foreclosed homes from the GSE.