A federal appeals court just handed the FDIC a win in a contract dispute over affordable housing covenants – see what this means for mortgage compliance
If you buy a discounted multifamily property from the government, you’re still on the hook for affordable housing promises – no matter what laws change.
On November 17, 2025, the Eleventh Circuit ruled on a dispute that began with a 1994 deal between Florida Housing Affordability, Inc. and the Resolution Trust Corporation (RTC). Florida Housing bought a 192-unit apartment complex at a steep discount, agreeing to keep rents low for forty years for lower-income and very low-income families, as defined in the contract. The agreement also required annual reports and an administrative fee, ensuring the affordable housing commitment would last the full term.
The RTC, a government agency created to handle assets from failed savings and loan institutions, was dissolved in 1995. Its responsibilities – including enforcing affordable housing agreements – were handed over to the Federal Deposit Insurance Corporation (FDIC). The FDIC then used Affordable Housing Group, Inc. (AHG) as its monitoring agent for this agreement.
Years later, around 2016, Florida Housing stopped submitting the required reports and paying the annual fee. AHG, acting for the FDIC, notified Florida Housing of the breach and filed suit in state court. Florida Housing countered, arguing that the agreement was no longer enforceable because Congress had repealed the law that created the RTC in 2010. They pointed to a clause in the contract that said the agreement would end if a change in federal law prevented enforcement.
The FDIC stepped in as a counterclaim defendant and moved the case to federal court. The district court dismissed Florida Housing’s counterclaim, holding that the agreement was still enforceable by the FDIC and its agent. Florida Housing appealed.
The Eleventh Circuit backed the district court. The judges said the contract’s plain language required Florida Housing to stick to its obligations for forty years, regardless of the repeal of the RTC’s statute. The court emphasized that the agreement allowed enforcement by the RTC or its successor, which clearly included the FDIC and its agents. Congress had already planned for the FDIC to take over these duties before the RTC’s statute was repealed, and the FDIC’s enforcement authority was preserved by other laws.
The court rejected Florida Housing’s argument that the repeal of the RTC’s statute ended its obligations. Instead, the judges held that the agreement’s requirements remained enforceable by the FDIC and AHG for the full contract term.
For mortgage professionals, this November 17 decision is a clear reminder: affordable housing covenants tied to government-backed multifamily properties don’t disappear when agencies change or laws are repealed. Obligations to keep rents below market and follow contract terms remain binding, and federal agencies can still enforce them.
If you’re in the business of acquiring, managing, or financing multifamily assets with affordable housing requirements, this case is a prompt to review your agreements closely. These obligations don’t vanish just because the original agency is gone or the statute has changed. The FDIC and its agents still have enforcement power, and courts are backing them up.
The Eleventh Circuit’s decision brings clarity for the mortgage industry: affordable housing promises made in the past are still enforceable today, and mortgage professionals should be ready to honor long-term commitments tied to government-backed deals.
