The FHFA announced the elimination of certain loan level pricing adjustments (LLPAs) that it charges particular borrowers based on their credit score, incomes, and down payments.
FHFA is eliminating upfront fees for:
- First-time homebuyers at or below 100 percent of area median income (AMI) in most of the United States and below 120 percent of AMI in high-cost areas;
- HomeReady and Home Possible loans (Fannie Mae and Freddie Mac's flagship affordable mortgage programs);
- HFA Advantage and HFA Preferred loans; and
- Single-family loans supporting the Duty to Serve program.
These changes are timely given the near tripling in mortgage rates over the last 12 months. There is no reduction in quality standards, though.
NAR has advocated for a reduction in LLPAs for several years.