Washington Report

Advocacy Updates from Washington D.C.

NAR Asks FHFA to Review G-fees in Light of Tax Reform

On Jan. 29, 2018, NAR sent a letter to Mel Watt, Director of the Federal Housing Finance Agency (FHFA), requesting a review of guarantee fees (g-fees) charged by the Government Sponsored Enterprises (GSEs) in light of recent tax changes. G-fees affect borrowing costs and affordability for homebuyers. Corporate tax rates were reduced as part of the Tax Cuts and Jobs Act.

The FHFA had previously set the g-fees based on a “target rate of return”. If g-fees are not lowered to reflect the lower corporate tax rate, realized returns at Fannie Mae and Freddie Mac will eclipse the FHFA’s target return. The letter requests that g-fees be reviewed and reduced.

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