The Federal Housing Finance Agency (FHFA) recently announced targeted changes to Fannie Mae and Freddie Mac’s guarantee fee pricing framework 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,” FHFA Director Sandra Thompson said. Thompson added that the changes 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, according to the FHFA. The implementation of new fees for cash-out refinance loans will begin Feb. 1, 2023, to minimize market and pipeline disruption.