The Federal Housing Finance Agency (FHFA) today announced it will delay implementation of its GSE refinance fee until Dec. 1, past the original effective date of Sept. 1. This delay comes after heavy engagement from CUNA, Leagues and other system partners, most recently in a letter from CUNA, the American Association of Credit Union Leagues and all 34 League presidents detailing the impact the fee and September 1st effective date was already having on credit union loans.
FHFA is also announcing that Fannie Mae and Freddie Mac will exempt refinance loans with loan balances below $125,000, nearly half of which are comprised of lower income borrowers at or below 80% of area median income. Affordable refinance products, in Fannie Mae’s Home Ready and Freddie Mac’s Home Possible programs, are also exempt.
“We thank FHFA for the action it took today related to the proposed adverse market fee,” said CUNA President/CEO Jim Nussle. “Delaying the implementation of the fee until December will protect locked-in loans in credit union pipelines from this fee and exempting loans under $125,000 will help protect low and moderate income borrowers looking to refinance their mortgages from bearing added costs at this challenging time. This is a positive step and we appreciate it.”
According to FHFA, the fee is necessary to cover projected COVID-19 losses of at least $6 billion at Fannie and Freddie, due to actions taken during the pandemic to protect renters and borrowers.