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.