The Federal Housing Finance Agency (FHFA) has issued targeted increases to Fannie Mae and Freddie Mac’s (the Enterprises) upfront fees for certain high-balance loans and second-home loans.
“These targeted pricing changes will allow the Enterprises to better achieve their mission of facilitating equitable and sustainable access to homeownership, while improving their regulatory capital position over time,” FHFA acting Director Sandra Thompson said. “Today’s action represents another step FHFA is taking to strengthen the Enterprises’ safety and soundness and to ensure access to credit for first-time home buyers and low- and moderate-income borrowers.
High-balance loans (referred to as super conforming loans by Freddie Mac) are defined as mortgage originated in certain designated areas above the baseline conforming loan limit. Starting April 1, 2022, the upfront fees for these types of loans will increase between 0.25 percent and 0.75 percent, tiered by loan-to-value (LTV) ratio. Second-home loans will see an increase in their upfront fees between 1.125 percent and 3.875 percent, tiered by LTV ratio.
Other programs, such as Home Ready, Home Possible, HFA preferred, and HFA Advantage, will not see these new fees. Moreover, loans to first time homebuyers in high-cost areas with incomes at or below 100 percent of area media income will have no specific high-balance upfront fees.