The Federal Housing Finance Agency (FHFA) on Jan. 19 announced further changes to Fannie Mae's and Freddie Mac's single-family pricing framework by introducing redesigned and recalibrated upfront fee matrices for purchase, rate-term refinance and cash-out refinance loans.
"These changes to upfront fees will strengthen the safety and soundness of the Enterprises by enhancing their ability to improve their capital position over time," said FHFA Director Sandra L. Thompson.
NAHB's initial analysis indicates that the pricing adjustments in the new framework will increase upfront costs in some categories of single-family loans acquired by Fannie Mae and Freddie Mac and decrease upfront costs in other categories, resulting in an overall modest increase.
The overall impact is lessened further by the fact that the following categories of loans will continue to have no upfront fees at all:
- First-time home buyers at or below 100% of area median income (AMI) in most of the United States and below 120% of AMI in high-cost areas;
- HomeReady and Home Possible loans (Fannie and Freddie's flagship affordable mortgage programs);
- HFA Advantage and HFA Preferred loans (Housing Finance Agency programs); and
- Single-family loans supporting the Duty to Serve program.
Additional changes to the Loan Level Price Adjustment matrices include new credit score and loan-to-value ratio buckets and the addition of a fee on certain loans with a debt-to-income (DTI) ratio greater than 40%.
The updated fees will take effect for loan deliveries and acquisitions beginning May 1, 2023, to minimize the potential for market or pipeline disruption.