FHFA eliminates upfront fees for some borrowers

Federal Issues FHFA Fannie Mae Freddie Mac GSEs Mortgages Fees Consumer Finance

On October 24, FHFA announced the elimination of upfront fees for certain first-time homebuyers, low-income borrowers, and underserved communities as part of the agency’s ongoing review of Fannie Mae and Freddie Mac’s (GSEs) pricing framework. Specifically, upfront fees are eliminated for (i) first-time homebuyers who are at or below 100 percent of area median income (AMI) in most of the U.S. and below 120 percent of AMI in high-cost areas; (ii) HomeReady and Home Possible loans under the GSEs’ affordable mortgage programs; (iii) HFA Advantage and HFA Preferred loans; and (iv) single-family loans supporting the Duty to Serve program. These changes “will result in savings for approximately 1 in 5 borrowers of the [GSEs’] recent mortgage acquisitions,” FHFA Director Sandra L. Thompson said in the announcement, noting that the agency is working with the GSEs and will announce an implementation date shortly. The pricing updates also include targeted increases to upfront fees for most cash-out refinance loans. Implementation of these fees will start February 1, 2023, in order to minimize market and pipeline disruption.