Chairman Cleaver Applauds FHFA Announcement It Will Eliminate Upfront Fees for First-time, Underserved Homebuyers

(Kansas City, MO) – Today, U.S. Representative Emanuel Cleaver, II (D-MO), Chairman of the Financial Services Subcommittee on Housing, Community Development, and Insurance, applauded the Federal Housing Finance Agency’s (FHFA) announcement of targeted changes to Fannie Mae and Freddie Mac’s guarantee fee pricing, eliminating upfront fees for certain borrowers and affordable mortgage products. Lenders commonly convert upfront fees into higher interest rates on a mortgage. Last week, Chairman Cleaver delivered a letter (LINK) to FHFA Director Sandra L. Thompson calling on the agency to immediately reduce or eliminate upfront fees as interest rates continue to rise and impact first-time homebuyers, low-income borrowers, and underserved communities.

“I’m very pleased that FHFA Director Thompson has heeded my calls to eliminate unnecessarily costly upfront fees for borrowers that have historically been left behind and are already acutely feeling the pinch of rising interest rates from the Federal Reserve,” said Chairman Cleaver. “This action from the FHFA demonstrates President Biden’s firm commitment to promoting equitable access to affordable housing, and I applaud the President and Director Thompson for taking this important step that will result in savings for roughly 20 percent of borrowers of Fannie and Freddie’s recent mortgage acquisitions. Moving forward, as the Fed continues to grapple with global inflation in a way that makes borrowing more costly, we must continue to implement policies that ease the borrowing burden of working and middle-class Americans, ensuring they still have an opportunity to achieve the American Dream through homeownership.”

The FHFA announced today it will eliminate upfront fees for:

• First-time homebuyers at or below 100 percent of area median income (AMI) in most of the United States and below 120 percent AMI in high-cost areas;
• HomeReady and Home Possible loans (Fannie Mae and Freddie Mac’s flagship affordable mortgage programs);
• HFA Advantage and HFA Preferred loans; and
• Single-family loans supporting the Duty to Serve program.

You can find the official letter from Chairman Cleaver to Director Thompson here.

Emanuel Cleaver, II is the U.S. Representative for Missouri's Fifth Congressional District, which includes Kansas City, Independence, Lee's Summit, Raytown, Grandview, Sugar Creek, Blue Springs, Grain Valley, Oak Grove, North Kansas City, Gladstone, Claycomo, and all of Ray, Lafayette, and Saline Counties. He is a member of the exclusive House Financial Services Committee; Chairman of the House Subcommittee on Housing, Community Development, and Insurance; member of the Select Committee on the Modernization of Congress; member of the Committee on Homeland Security; and a Senior Whip of the Democratic Caucus.