FHFA Announces Elimination of GSE Upfront Fees for HFA Loans, Other Affordable Mortgages

The Federal Housing Finance Agency (FHFA) announced this week that government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac will soon eliminate upfront fees for single-family mortgage loans assisting low- and moderate-income home buyers, including Fannie Mae HFA Preferred and Freddie Mac HFA Advantage loans. The GSEs will increase fees for most cash-out refinance loans.

By eliminating the upfront fees, FHFA is hoping the GSEs will be better able to support sustainable homeownership opportunities for underserved households and increase equity in the housing finance market. In addition to the HFA products, the GSEs will be ending the upfront fees for all mortgages for first-time home buyers earning at or below 100 percent of area median income (120 percent for those living in high-cost areas), all Fannie Mae HomeReady and Freddie Mac HomePossible loans, and all single-family loans that support the GSEs’ Duty-to-Serve programs. FHFA estimates that nearly 20 percent of home buyers served by the GSEs will benefit from the new policy.

The fee reductions will take effect as soon as possible. On a conference call discussing the new policy, FHFA said both GSEs will contact their partners soon to notify them of the timing. The new fees for cash-out refinance loans will go into effect February 1, 2023.

NCSHA thanks FHFA, Fannie Mae, and Freddie Mac for taking this step, which will allow HFAs to help more working families achieve the dream of homeownership.