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Analysis: GSE Report on Single-Family Guarantee Fees

Pursuant to the Housing and Economic Recovery Act of 2008, the Federal Housing Finance Agency (FHFA) has released its annual report on single-family guarantee fees charged by the government sponsored entities (GSEs) Fannie Mae and Freddie Mac. 

These guarantee fees are intended to cover credit risk and administrative/operational costs associated with acquiring single-family loans from lenders. In particular, the report provides an analysis of product type, risk class, and lender delivery volume which provides a comparison to the prior year; it is required to contain an analysis of the average guarantee fees and a breakdown by product type, risk class, and seller size along with a recommendation to raise or lower fees in the future. 

The report discusses the guarantee fees charged in 2021 and provides a four-year perspective with the data back to 2018. Significant findings in the report indicate: 

  • For all loan products combined, the average single-family guarantee fee increased by 2 basis points to 56 basis points in 2021. The upfront portion of the guarantee fee, which is based on the credit risk attributes (loan purpose, loan-to-value ratio, and credit score), increased by 2 basis points to 13 basis points on average in 2021.  
  • The average guarantee fee in 2021 on 30-year fixed rate loans rose by 1 basis point to 59 basis points, while the average guarantee fee on 15-year fixed rate loans rose by 6 basis points to 42 basis points. Fifteen-year loans were disproportionally affected by the adverse market refinance fee because 15-year loans were more likely to be refinance loans. This fee was eliminated on Aug. 1, 2021. 

Click here to view the 25-page report in its entirety. 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at [email protected].

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