On January 5th, the Federal Housing Finance Agency announced increases for upfront fees charged by Fannie Mae and Freddie Mac for second home mortgage loans and some high balance mortgage loans that exceed standard conforming loan limits, according to NAHBNow. Effective April 1, 2022, the move will increase the purchase cost of second homes as well as homes in high cost markets.
Upfront fees on some high balance loans sold to Fannie Mae and Freddie Mac will rise between 0.25% and 0.75%, while upfront fees for second home mortgage loans will increase between 1.125% and 3.875% based on loan-to-value ratio.
Under the plan announced today, the buyer of a second home with a $300,000 mortgage loan amount and loan-to-value ratio of 65% will pay an additional fee of $4,875 if their mortgage is acquired by Fannie Mae or Freddie Mac. Prior to the effective date of today’s announcement, the same buyer would pay no additional fee for the comparable mortgage.
“With the nation in the midst of a housing affordability crisis and many more workers electing to telework, this is exactly the wrong time for federal regulators to be raising fees on homeownership and second homes,” said NAHB Chairman Chuck Fowke. “If FHFA is truly interested in promoting housing affordability, the agency would not be taxing home buyers to pad the capital positions for Fannie Mae and Freddie Mac.”
