The Federal Housing Finance Agency (FHFA) took steps today to meet one of the goals set forward in its 2022 Scorecard for the GSEs Fannie Mae and Freddie Mac, announcing targeted increases to the upfront fees for certain GSE high balance and second home loans.
High balance loans (called super conforming loans by Freddie Mac) are mortgages originated in certain designated areas that exceed the baseline conforming loan limit. That limit is set at $647,200 for 2022. Fees for these loans will increase between 0.25 percent and 0.75 percent, tiered by loan-to-value ratio. Upfront fees for second home loans rise between 1.125 percent and 3.875 percent, also tiered by loan-to-value ratio.
FHFA said the new fees will go into effect for deliveries and acquisitions beginning April 1, 2022. The long lead time is intended to minimize market and pipeline disruption.
To ensure that the GSEs will continue to provide strong support for affordable housing, pricing of certain programs, including 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 L. Thompson. "Today’s action represents another step FHFA is taking to strengthen the [GSEs’] safety and soundness and to ensure access to credit for first-time home buyers and low- and moderate-income borrowers."