Fannie Mae and Freddie Mac’s upfront fees for certain high balance loans and second home loans are expected to jump beginning April 1st, 2022 – no joke. High balance loans will increase between 0.25 percent and 0.75 percent. For second home loans, upfront fees will increase between 1.125 percent and 3.875 percent, tiered by loan-to-value ratio. In a positive move, loans to first time homebuyers in high cost areas with incomes at or below 100 percent of area median income will now have no specific high balance upfront fees. Remember too that the 2022 conforming loan limits by Fannie Mae and Freddie Mac just rose to $647,200, an leap from $548,250 in 2021.
In speaking to Bonnie Masefield at Lee Bank, she confirmed this information and offered that this move may create more interest in the local portfolio mortgage lending options by high-end and second homebuyers, as is the intent. As both Bonnie and Eric Carlotto from Greylock Credit Union pointed out, many local lenders have very competitive portfolio products and alternatives to these higher fee Fannie/Freddie programs. Both also expressed that these changes may… change! Everything is moving and shifting right now. The FHFA (Federal Housing Finance Administration) who oversees Fannie and Freddie, said it is taking these steps to free up available credit for first-time home buyers and low- and moderate-income borrowers – presumably to leave the high end and luxury lending to the portfolio products. This might help our year-round and 1st time homebuyers with financing options, and our local lenders are offering or gearing up with new products and programs to fill the gaps. Erin also noted that this is something that could have an impact on refis as well. We have reached out to all of our awesome platinum affiliate lenders and expect that we will offer a Lending Panel in February to discuss an update of this change, new local products, and some great Mass Housing options that are also coming available.