FHFA announces upfront fees increase coming soon for high-balance & second-home loans
If you have a high-balance mortgage or own a vacation home, expect to see an increase in upfront fees this spring.
Upfront fees on specific high-balance (above the conforming loan limit) and second-home mortgage loans sold through the Enterprises, Fannie Mae and Freddie Mac, will see price hikes effective April 1, 2022, according to the latest press release from the Federal Housing Finance Agency.
Based on loan-to-value ratio, upfront fees for high-balance loans will see an increase between 0.25% and 0.75%, while upfront fees for second-home loans will increase between 1.125% and 3.87%, also dependent upon loan-to-value ratio.
“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 in the press release.
Exemptions to the new upfront fees include HomeReady, Home Possible, HFA Preferred and HFA Advantage mortgage programs.
First-time homebuyers, with incomes at or lower than 100% of the area median income in high cost areas, will not have specific high-balance upfront fees.
Thompson concluded her statement with, “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.”