FHFA Hikes Fees for High Balance and Second Home Mortgages

The Federal Housing Finance Agency introduced new upfront fees on Wednesday, January 5, 2022, for some high-balance and second-home loans sold to Fannie Mae and Freddie Mac. The new pricing framework will take effect April 1, 2022, which equates to loans locked starting sometime in January and February, so we will see these increases shortly.
  1. Most FNMA and FHLMC high balance loans over $647,200 will now have a 1 point charge with 5% to 24.9% down payment, ¾ of a point charge with 25% to 40% down payment, and ½ point charge with more than 40% down. This charge applies to purchases, and no cash-out refinances. Cash-out refinances have a higher charge. We have not been informed of this charge being on FHA or VA loans. These charges will not be charged to first-time homebuyers with income less than or equal to 100% of area median income.
  2. Mortgages for second homes will see upfront fees between 1.125 points on loans under 60% loan to value and up to 4.125% for loans 80% loan to value and higher. This move by the Government equates second home loans to investment loans, so purchasing a second property as an investment versus a second home may help secure a better rate.
We are ready to review these changes and provide you with all the loan options available to ensure you can secure the most cost-effect mortgage possible.

* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.

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