The Federal Housing Finance Agency (FHFA) today announced targeted changes to Fannie Mae and Freddie Mac’s (the Enterprises) guarantee fee pricing by eliminating upfront fees for certain borrowers and affordable mortgage products, while implementing targeted increases to the upfront fees for most cash-out refinance loans.
As part of the pricing changes stemming from the Agency’s ongoing review of the Enterprises’ pricing framework announced last year, 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 (Fannie Mae and Freddie Mac’s flagship affordable mortgage programs);
- 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,” said Director Sandra L. Thompson. “Today’s announcement will result in savings for approximately 1 in 5 borrowers of the Enterprises’ recent mortgage acquisitions.”
The new fee reductions will go into effect as soon as possible. FHFA will work with the Enterprises and announce an implementation date shortly. The implementation of new fees for cash-out refinance loans will begin February 1, 2023, in order to minimize market and pipeline disruption.
Today’s pricing changes build upon the upfront fee increases for second home loans and high balance loans announced earlier this year. 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 fostering capital accumulation, achieving commercially viable returns, and ensuring a level playing field for all sellers.