The Federal Housing Finance Agency (FHFA) announced increases to upfront fees for certain high-balance loans and second-home loans sold to Fannie Mae and Freddie Mac.
Upfront fees for high-balance loans — mortgages originated in designated areas above the baseline conforming loan limit — will rise between 0.25% and 0.75%, tiered by loan-to-value (LTV) ratio. For second-home mortgages, upfront fees will grow between 1.125% and 3.875% and also are tiered by LTV.
The new fees will go into effect April 1, the FHFA announced, to minimize market and pipeline disruption.
“These targeted pricing changes will allow [Fannie and Freddie] to better achieve their mission of facilitating equitable and sustainable access to homeownership while improving their regulatory capital position over time,” said FHFA acting director Sandra L. Thompson. “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 homebuyers and low- and moderate-income borrowers.”
Some affordable-housing programs offered by the government-sponsored enterprises, including Fannie’s Mae’s HomeReady and HFA Preferred products, as well as Freddie’s Home Possible and HFA Advantage products, are exempted from the fee hikes. Also, loans in high-cost areas to first-time homebuyers who have incomes at or below 100% of the area median income also will be exempt.