The Federal Housing Finance Agency (FHFA) is making changes to Fannie Mae and Freddie Mac’s guarantee fee pricing by eliminating upfront fees for certain borrowers and loan products.
Specifically, the FHFA is eliminating upfront fees for first-time homebuyers at or below 100 percent of area median income (AMI) in most of the United States and below 120 percent of AMI in high-cost areas; HomeReady and Home Possible loans; HFA Advantage and HFA Preferred loans; and Single-family loans supporting the Duty to Serve program.
“FHFA is eliminating upfront fees for certain first-time homebuyers, low-income borrowers, and underserved communities to promote sustainable and equitable access to affordable housing,” FHFA Director Sandra Thompson said. “Today’s announcement will result in savings for approximately 1 in 5 borrowers of the Enterprises’ recent mortgage acquisitions.”
FHFA will announce an implementation date shortly in consultation with Fannie Mae and Freddie Mac. The implementation of new fees for cash-out refinance loans will begin on Feb. 1, 2023, to minimize market and pipeline disruption.
These pricing changes build upon the upfront fee increases for second home loans and high-balance loans announced earlier this year.
The FHFA will continue to review and update the pricing framework to meet the objectives set in the 2022 Scorecard to support core mission borrowers while ensuring a level playing field for all sellers.