The Federal Housing Finance Agency is pushing for more affordable housing, which means that homebuyers with good credit scores will soon have to pay higher mortgage rates and fees. This is to help subsidize people with riskier credit ratings, as reported by The Washington Times. Starting May 1, a new federal rule enforced by the Biden administration will require homebuyers with a credit score of 680 or higher to pay an additional $40 per month compared to those with worse credit when taking out a $400,000 home loan. This will affect mortgages from private banks across the nation, as Fannie Mae and Freddie Mac, federally-backed home mortgage companies, will establish the loan-level price adjustments (LLPAs).
According to The New York Post, mortgage industry professionals are calling this new rule an "ugly surprise" for homebuyers who have worked hard to build their credit scores. Many are finding it difficult to explain to clients why having a high credit score and a large down payment is now considered a negative. David Stevens, the Federal Housing Administration commissioner for the Obama administration, said that this rule is unprecedented. On a positive note, middle-income households have gained $122,000 in home value in the last decade.
If this is for real, please expect a huge uproar from the A+ Credit people of the world!
