OPINION: ‘Why Is Biden Admin Punishing Financially Responsible Homeowners?’

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  • In January 2023, the Federal Housing Finance Agency announced that two major government- sponsored entities, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), will be adjusting their single-family pricing framework, starting on May 1.
  • This will change the fees known as loan-level price adjustments (LLPAs) and affect all future homebuyers ’ mortgage rates — right in the middle of the spring housing market and in the face of what many economists predict is a coming recession.
  • With the new fees, a homebuyer with a credit score of 680 or above will now have to pay a 1 percent LLPA fee. Those who make a 15 percent to 20 percent down payment will see the biggest increase — about $40 or more on their monthly mortgage payments.
  • In contrast, people with credit scores below 680 — riskier borrowers who are more likely to default on mortgage payments — would instead receive a 1.75 percent discounted LLPA fee.