• Facebook
  • Instagram
  • Twitter
  • LinkedIn
  • Mail
  • Schedule Call Now
Call Now (619) 934-7775
Mortgage Heroes | Be the Hero of Your Neighborhood
  • Home
  • Loans
  • Resources
  • About Us
  • Contact
  • Apply Now
  • Menu

FHFA to increase fees April 1, 2022

The release date of the new FHFA fee increase would seem to be a really easy lay up in the land of early April Fools jokes; however, with the gears turning in the new calendar year we find this is actually not a joke. On January 5, 2022 the FHFA announced upfront fee increases for certain high balance loans and second home loans to be delivered to Fannie Mae and Freddie Mac. As a county with many “high cost” loan balances San Diego County and its numerous municipalities that fall within this category will all be subject to these new fees beginning April 1, 2022.

High Balance mortgages are mortgages originated in areas or regions above the conforming loan limit. (In a recent article we shared the increased conforming loan limits for 2022 for reference.) The upfront fee increase for high balance loans will increase in a tiered fashion depending on the loan to value ratio (LTV). For primary residences these fee increases will be between 0.25% – 0.75% with the lower LTV representing the lower end of the fee increase and the higher LTV representing the higher fee increase. For second homes these fee increases will be between 1.125% – 3.875% with the lower LTV representing the lower end of the fee increase and the higher LTV representing the higher fee increase. Future guidance is expected along with clarifications from banks as lenders have to calibrate their loan programs to accommodate these changes prior to the April 1, 2022 deadline.

NOTE: For you First time homebuyers in high costs areas who have incomes at or below 100% of the areas median income, you will have no specific high balance upfront fees, but please prepare yourself for this could change against your favor with a simple policy chance and industry bulletin.

The spirit of the decision. “These targeted pricing changes will allow the Enterprises to better achieve their mission of facilitating equitable and sustainable access to homeownership, while improving their regulatory capital position over time,” said FHFA Acting Director Sandra L. Thompson. “Today’s action represents another step FHFA is taking to strengthen the Enterprises’ safety and soundness and to ensure access to credit for first-time home buyers and low- and moderate-income borrowers.” In short, it’s a policy decision where the two sides of this coin are: bring more money in, and then use those funds to reach disparate groups.

So what does this mean? In a mortgage environment where we are already facing increasing rates as a result of red hot inflation and Fed tightening monetary policy as a result, this is surely to create some affordability crunch on aspiring homebuyers or refinancers who are only beginning their finance journey this coming spring. To begin with high balance loans are more costly due to the nature of supply and demand of money available to fund these loans, therefore they commonly have interest rates higher than that of conforming loans. Additionally, this could put some unnecessary price pressure on sellers who are seeking top dollar for their sale still in 2022 as the buyer pool may thin out a bit and or decide they do not wish to spend top dollar on price because the costs to borrow have increased. From the government’s perspective, they hope to shore up their financial holdings to further increase the strength of both Fannie Mae and Freddie Mac so that they can begin closing the homeownership gaps they are so focused on curing.

How will we know the impact of this? The market data will reveal the positive or negative impact of this fee increase over time. Where the policy seems to draw a straight line between increasing fees to increase homeownership opportunities, the policy still does not address the 2 main threats that prevent borrowers from becoming approved for homeownership: Income and credit. In an ideal setting, the fees collected should go to assistance that directly helps aspiring homeowners close the gap between where they’re starting from and the goal of homeownership – and then assist and guide them in crossing all disqualifying elements from their borrower profile in order to actually help them achieve home ownership. If this step becomes overlooked, never planned, or poorly executed, what we’re left with is a fee increase at the onset, that fails to deliver the promises to disparate groups the policy aims to help.

For over 16 years, we have found ourselves in the breach of these two sides of the same coin. Where borrowers cannot qualify, we teach them how to qualify. Where a borrower does not understand what they need to correct in their credit, we point them in the right direction. The gap that separates a borrower from homeownership can be very small but make them feel like they’re crossing the Grand Canyon. We have found that policy can only get homeowners part of the way there. Individual attention to each borrows specific steps in curing their financial picture in the eyes of underwriting isn’t solved at the legal level, the product level, or even the fee level. It’s handled at the personal level where borrowers fully understand their financial health, make qualified decisions about how they wish to pursue homeownership, and have a running mate at their side while doing so. April 1, 2022 will come and go, but this approach to conducting business will not waver.

Schedule a Call Today to Discuss Your Home Loan Needs!

Schedule Your Call Today!

Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share on Tumblr
  • Share on Vk
  • Share on Reddit
  • Share by Mail

CONTACT US DIRECTLY

If you would like to speak with our team about your home loan questions, please complete the form below. You can also start your loan application online by APPLYING NOW.

  • This field is for validation purposes and should be left unchanged.

Rates & Fees Disclosure:
‡ The payment on a $300,000 30-year fixed-rate VA loan at 3.000% with a 80% loan-to-value ratio is $1,292.01 with 0 (zero) origination points due at closing. The annual percentage rate (APR) is 3.235%. Payment does not include tax and insurance premium impounds. The actual payment amount will be greater. By refinancing your existing loan, the total finance charges may be higher over the life of the loan. Some state and county maximum loan amount restrictions may apply. Appraisal fee of $600, Processing Fee of $895, Underwriting Fee of $795 included in APR calculations with borrower paying 0 (zero) loan origination points.

‡ Based on Mortgage Heroes internal data.

RECENT POSTS

  • Monday Mortgage Minute – The Fed is up to batJanuary 30, 2023 - 5:37 pm
  • Monday Mortgage Minute – Uh oh the Empire State Manufacturing Index was super bad!January 23, 2023 - 7:48 pm
  • Monday Mortgage Minute – What the Fed Said, PPI, Existing Home Sales & Homebuilder IndexJanuary 17, 2023 - 1:51 am
  • Monday Mortgage Minute – Jobs data conflict and Jerome Powell speaks this week!January 10, 2023 - 6:18 am
  • Monday Mortgage Minute – WE HAVE A NEW SHOW FORMAT!January 2, 2023 - 9:55 pm

Follow us on Facebook

WE GOT YOUR SIX!

Mortgage Heroes has been helping Active Military and Veterans for more than 15+ years. This page is made to help all military families get the answers they are looking for when it comes to housing. Whether its questions about using your VA or new listings in SD, Mortgage Heroes are here to support just as each military member has supported this country!

GET IN TOUCH

Mortgage Heroes
873 Anchorage Place
Chula Vista, California 91914
group@yourmortgageheroes.com
(619) 934-7775
NMLS# 325149
See NMLS consumer access page

© Copyright - Mortgage Heroes | Locations | Privacy Policy | Disclosures & Licenses | Blog
  • Facebook
  • Instagram
  • Twitter
  • LinkedIn
  • Mail
Successfully Navigating Increasing Interest Rates in 2022 Using your VA Home Loan Benefit to Relocate to California in 2022
Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

AcceptDo Not AcceptSettings

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refuseing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Privacy Policy

You can read about our cookies and privacy settings in detail on our Privacy Policy Page.

Privacy Policy
Accept settingsHide notification only