FHFA delays Refi Tax until December 1, 2020

The Federal Housing Finance Agency that oversees Fannie Mae and Freddie Mac (conventional lenders), has announced they are delaying the “adverse market fee” until December 1, 2020.

There was significant balking across the mortgage industry when the FHFA announced the fee back on the evening of August 12th which effectively went into effect immediately on new refi’s (since it’s based on when loans are delivered to Fannie Mae or Freddie Mac). This was essentially a 0.5% tax on mortgage lenders existing pipelines – some loans in the pipeline were not able to have the 0.5% hit factored into the pricing of the interest rate.

With this announcement, the following loans will be exempt from the 0.5% hit:

  • Refinance loans with loan balances below $125,000
  • Fannie Mae HomeReady refinances
  • Freddie Mac Home Possible refinances

NOTE: Purchase loans have always been excluded from the 0.5% hit.

The 0.5% hit to fee pencils out to be around a 0.125-0.250% higher interest rate.

If you are interested in taking advantage of the current extremely low mortgage rates, you can start an application here (only for homes located in Washington state). I am happy to help you!

 

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