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Some high balance loans and mortgages on second homes sold to Fannie Mae or Freddie Mac could soon face higher upfront fees.
The Federal Housing Finance Agency said in a statement Wednesday that a new pricing framework would help strengthen the safety and soundness of the government-sponsored enterprises.
The new fees will go into effect for deliveries and acquisitions beginning April 1, the FHFA said, which the agency said would minimize market and pipeline disruption.
The new pricing framework will not apply to certain programs that support affordable housing, including HomeReady, Home Possible, HFA Preferred and HFA Advantage. Loans to first-time homebuyers in high cost areas with incomes at or below 100 percent of area median income are also not affected by the changes.
“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,” Acting Director Sandra L. Thompson said in the statement. “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.”
For high balance loans, which are mortgages originated in certain designated areas above the baseline conforming loan limit, the fees will increase between 0.25 percent and 0.75 percent, tiered by loan-to-value ratio. Fannie Mae refers to these mortgages as high balance loans, and Freddie Mac calls them super conforming loans.
Loans for second homes will see fees increase between 1.125 percent and 3.875 percent, tiered by loan-to-value ratio.
The FHFA had set an objective in its 2022 Scorecard for Fannie Mae, Freddie Mac, and Common Securitization Solutions for the GSEs to update the current pricing framework to “increase support for core mission borrowers, while fostering capital accumulation, achieving viable returns, and ensuring a level playing field for small and large sellers,” the FHFA said.
