US: Authorities dismiss irregularities alleged by Trump regarding the property of a Fed director.

By Marisa Taylor and Chris Prentice

(Reuters)- The property tax authority in Ann Arbor, Michigan, stated that Federal Reserve Governor Lisa Cook did not violate the rules for obtaining tax benefits on a house that Cook declared as her primary residence.

The conclusion, which came in response to a Reuters request for the city to review Cook's property records, could bolster Cook's defense against the Trump administration's efforts to remove her from the Federal Reserve board.

Ann Arbor has "no reason to believe" that Cook violated property tax rules, city advisor Jerry Markey told Reuters. Cook has lived elsewhere, and city records indicate she requested permission from Ann Arbor authorities to rent the Michigan house for a short period.

Temporarily being absent from a residence or renting it out for a short period would not disqualify one from receiving a tax exemption in Ann Arbor, said the tax department official. "Temporarily living elsewhere does not necessarily make the homeowner ineligible for a primary residence exemption," Markey said.

The official's statements come as President Donald Trump's administration accuses the Fed director of fraud related to mortgages on her Ann Arbor home and another she purchased in Atlanta. Bill Pulte, director of the Federal Housing Finance Agency (FHFA), led the effort, denouncing Cook on social media and referring the matter to the Department of Justice, which launched an investigation.

The question is whether Cook, whom Trump tried to remove from the Fed board, lied to her creditors when obtaining the two mortgages. The Trump administration, citing her mortgage contracts, alleged that she improperly told both creditors that the loan was for a primary residence. By declaring a house as a primary residence, the homeowner can—but not always—secure a better interest rate on the loan and, separately, may receive discounts from local authorities on property taxes.

An appeals court was expected to decide on Monday whether Cook could remain in her position while litigation over Trump's attempt to fire her was pending. Regardless of the court's decision, an immediate appeal to the Supreme Court is expected, further complicating Cook's situation at the Fed's upcoming two-day meeting.

Reuters reported last week that Cook, according to a mortgage loan estimate in Atlanta, had informed her lender that the property would be a "vacation home," not a primary residence. In a social media post following the news agency's story, Pulte wrote that the "vacation home" claim in the Atlanta mortgage documentation could still be fraudulent if she eventually secured the loan by stating otherwise.

"This is extremely concerning," Pulte wrote on X, "and, in my opinion, provides further evidence of intent to defraud."

The full extent of Cook's declarations to his creditors remains unclear, including any documentation that may have altered the characterization of the property as a "vacation home" at the time the mortgage was settled. Local authorities in Georgia told Reuters that Cook never declared the house as his primary residence for tax purposes.

Cook has repeatedly denied any wrongdoing. In a written statement on Monday, her lawyers said: "The attempt to remove Director Cook is based on hand-picked social media posts by the FHFA director, which crumble under basic scrutiny."

Since securing a mortgage on the Michigan home in 2021, local property records show she obtained city approval to rent it out for short periods in October 2022 and again in April 2024. Some cities, like Ann Arbor, require homeowners to obtain a license to rent their home, even for short periods.

In April 2025, months before Pulte began publicly accusing her of fraud, Cook sought approval to list the house as a long-term rental, according to local records and municipal authorities. In July, she told the city that she had hired a rental company to manage the property, authorities said.

Cook now has until the end of the year to revoke the tax exemption on the house, said Markey, the city of Ann Arbor's advisor.

Property tax records in both states, along with the disclosure of Cook's "vacation home" in Atlanta, could be considered strong factors in her defense, real estate and legal experts said. For any conviction on mortgage fraud, which is rarely considered a crime in the United States, they said prosecutors would have to show that she deliberately tried to deceive her lenders.

Paul Pelletier, a former federal prosecutor in Washington who worked on bank fraud, said that the Justice Department historically only pursued cases where a financial institution suffered significant losses. "This would never have crossed my desk, much less been prosecuted," he said, referring to the charges against Cook so far.

The rates on Cook's two mortgages show that she did not enjoy any discounts compared to the prevailing rates available to borrowers when she negotiated the loans in 2021.

Their rate on a 15-year Michigan property loan was 2,875%, compared to the prevailing national rate at the time, which ranged from 2,23% to 2,45%, according to Freddie Mac data. And the rate on a 30-year Atlanta property loan was 3,25%, compared to the prevailing rate at the time, which ranged from 2,93% to 3,04%, according to Freddie Mac data.