The Federal Housing Finance Agency (FHFA) intends to promote equity and enhance first-time homebuyers’ and minorities’ access to housing by increasing fees for borrowers with higher credit scores and decreasing them for those with lower scores.
Under the new fee structure, Alice, with a 20% down payment, will be charged an LLPA of 1.5% (since her credit score is 680). This means she will pay $3,600 in fees on her loan amount of $240,000 ($240,000 * 1.5%).
Schiff wryly advised those with good credit scores, saying, “Just miss a few payments, screw up your credit score. That will help your mortgage rate.”
The impact on affordability will be felt differently by borrowers depending on their credit scores, down payments, and other factors.