FHFA: G-Fees More Equitable for Extra-Small Mortgage Lenders in 2016

The average single-family guarantee fees (g-fees) charged by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac (all loans) fell by two basis points in 2016 – from 59 basis points to 57 basis points – according to a report from the GSEs’ regulator, the Federal Housing Finance Agency (FHFA).

The decrease was due to competitive pressures between the GSEs and, to a much lesser degree, changes in the product-type mix from 2015, the FHFA says in its annual report to Congress on g-fees.

The average g-fee in 2016 on a fixed-rate, 30-year loan fell by two basis points to 61 basis points, according to the report. The fee on a fixed-rate, 15-year loan fell by four basis points to 37 basis points. The fee on an adjustable-rate mortgage remained steady at 59 basis points.

Extra-small lenders paid, on average, two basis points less than extra-large lenders in total g-fees.

G-fees among the size groups have been comparable, with only small differences in any year since 2013, the FHFA reports.

The most recent adjustment to the g-fees came in 2015, when the FHFA announced that it was making certain minor changes to the fees that would slightly reduce, maintain or increase costs for different categories of loans.

This included removing the 25-basis-point upfront adverse market charge established in 2008 as an on-top pricing increase to reflect the unfavorable condition of the market at the time.

In addition, the FHFA made minor fee adjustments to a subset of enterprise loans that included certain loans in the GSEs’ upfront loan-to-value ratio/credit score pricing grid, as well as certain loans with risk-layering attributes (i.e., cash-out refinances, investment properties, loans with secondary financing and jumbo conforming loans).


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