FHFA (Federal Housing Financing Agency) announces increased pricing for High Balance and Second home loans effective February 1, 2022 for most lenders.
Recently, the Federal Housing Finance Agency (FHFA) announced the introduction of new loan level price adjustments (LLPAs) for some Fannie Mae and Freddie Mac high balance and second home transactions. For complete details, please review the GSE announcements. A summary of changes, effective February 1, 2022, are provided below:
- High balance LLPAs will increase (worsen) 25 – 75 bps.
- Second home LLPAs will increase (worsen) 1.125 – 3.875 pts.
- Freddie Mac high balance ARMs will be priced 100 – 175 bps higher than Fannie Mae.
- To ensure credit access to first-time and low to moderate income borrowers, the high balance LLPAs will not apply for first-time home buyers with income less than or equal to 100% Area Median Income.
This pricing increase will go into affect almost immediately in order for the pricing to be reflected accurately once the loan is delivered. Fannie Mae provided an example of these fees in their lender letter below.
This pricing increase will go into affect almost immediately in order for the pricing to be reflected accurately once the loan is delivered. Freddie Mac Lender letter provides the fee in a percentage.