NAR Statement on FHFA LLPA Structure Changes

WASHINGTON (January 19, 2023) – National Association of Realtors® President Kenny Parcell issued the following statement in response to the announcement of changes made to the loan level pricing adjustments (LLPA) structure by Federal Housing Finance Agency:

“We appreciate FHFA’s efforts to revise the structure for loan level pricing adjustments as well as making the 2022 changes permanent. NAR and our members were supportive of most of the changes made to LLPAs this past fall, and we will continue to advocate for LLPA reform as the housing market continues to struggle with the sharpest blow to affordability in decades. These changes make permanent reduced or eliminated fees for first-time homebuyers and those with low or moderate incomes. Furthermore, these changes include significant reduced fees for many borrowers with lower credit scores, but strong down payments. However, fees are raised on some borrowers with good credit scores and moderate down payments, hitting middle-wealth homebuyers. Furthermore, FHFA included new fees on borrowers with higher debt-to-income scores. NAR will review other changes in the new LLPA structure and share our concerns with the FHFA.

In the wake of a three-percentage point increase in mortgage rates, now is not the time to raise fees on homebuyers. Furthermore, the FHFA needs to address its recent increase in fees on homebuyers in high-cost markets as well as guarantee fees that impact all homebuyers.  Homebuyers are hurting and these changes are overdue.  Now is the time.”

Fannie Mae and Freddie Mac charge both a market-wide flat guarantee fee as well as upfront fees LLPAs that are tailored to credit scores and down payments for individual borrowers. The FHFA directed Fannie Mae and Freddie Mac to reduce the LLPAs in 2022 on homebuyers but raised them in high-cost markets. Furthermore, guarantee fees were never reduced in the wake of the 2017 Tax Cuts and Jobs Act that lowered their costs. NAR looks forward to continuing our work with the FHFA to collaborating to improve affordability for homebuyers.

The National Association of Realtors® is America's largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.

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