The Federal Housing Finance Agency (FHFA) took action today to meet one of the targets set in its 2022 scorecard for GSEs Fannie Mae and Freddie Mac, announcing targeted increases in upfront fees for some high balance GSE loans and second home.
High Balance Loans (referred to as Super Compliant Loans by Freddie Mac) are mortgages issued in certain designated areas that exceed the base Compliant Loan limit. This limit is set at $ 647,200 for 2022. The fees for these loans will increase between 0.25% and 0.75%, scaled against loan-to-value. The initial fees for second home loans increase between 1.125% and 3.875%, also scaled by the loan-to-value ratio.
The FHFA said the new fees will take effect for deliveries and acquisitions from April 1, 2022. The long lead time is intended to minimize disruption to the market and pipelines.
To ensure that GSEs will continue to provide strong support for affordable housing, the prices of some programs, including HomeReady, Home Possible, HFA Preferred, and HFA Advantage, will not be affected by the new fees. Additionally, loans to first-time buyers in high-cost areas with incomes equal to or less than 100 percent of the area’s median income will not have specific high upfront fees.
“These targeted price changes will allow businesses to better accomplish their mission of facilitating fair and sustainable access to homeownership, while improving their regulatory capital over time,” said Acting Director Sandra L. Thompson. “Today’s action represents another measure taken by the FHFA to strengthen the [GSEs’] security and soundness; and ensuring access to credit for first-time buyers and low- and moderate-income borrowers. “