FHFA sets targeted fee increases for certain loans

Federal Issues FHFA Fannie Mae Freddie Mac GSEs Mortgages

On January 5, FHFA announced targeted increases to the upfront fees for certain high-balance loans and second home loans sold to Fannie Mae and Freddie Mac (GSEs). Upfront fees for high-balance loans will increase between 0.25 percent and 0.75 percent, tiered by loan-to-value ratio. Upfront fees for second home loans will increase between 1.125 percent and 3.875 percent, also tiered by loan-to-value ratio. In order to continue to provide support for affordable housing, certain loans, including HomeReady, Home Possible, HFA Preferred and HFA Advantage, will not be subject to the increased fees. Additionally, “loans to first time homebuyers in high cost areas with incomes at or below 100 percent of area median income will have no specific high balance upfront fees.” The new fees will take effect April 1, to “minimize market and pipeline disruption,” FHFA stated. Acting Director Sandra Thompson said the fee increases are another step FHFA is taking to strengthen the GSEs’ safety and soundness, while also ensuring access to credit for first-time homebuyers and low- and moderate-income borrowers. “These targeted pricing changes will allow the [GSEs] to better achieve their mission of facilitating equitable and sustainable access to homeownership, while improving their regulatory capital position over time,” Thompson said.