January 06, 2022

FHFA announces targeted increase to GSE upfront fees

HouseThe Federal Housing Finance Agency (FHFA) Wednesday announced a targeted increase to the government-sponsored enterprises' (GSEs) – Fannie Mae and Freddie Mac – upfront fees for certain high balance and second home loans. The increases go into effect April 1, 2022.

Of note, the changes increase upfront fees between 25 and 75 basis points for certain mortgages that exceed the standard conforming loan limit and increase the upfront fee for mortgages on second homes by 1.125 and 3.875 basis points. The upfront fees for high balance loans will increase between 0.25 percent and 0.75 percent, tiered by loan-to-value ratio.

The existing beneficial pricing treatment of certain programs – such as HomeReady, Home Possible, HFA Preferred, and HFA Advantage – will not be altered by the new fees. In addition, loans to first time homebuyers in high-cost areas with incomes at or below 100 percent of area median income will have no specific high balance upfront fees.

"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," said Acting Director Sandra Thompson in a release on the announcement. "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."

NAFCU previously commended the FHFA for announcing the one-year suspension of certain amendments to the Preferred Stock Purchase Agreements (PSPAs) in October, including the limits on the cash window, multi-family lending, loans with higher risk characteristics, and second home and investment properties.

View the full announcement. The FHFA will continue to work in conjunction with the Treasury Department and additional changes are expected; NAFCU will keep credit unions up-to-date on the latest from the FHFA.