FAQs

1. What types of mortgages are affected by Fannie Mae’s recent changes?

The recent changes affect second home mortgages, investment properties, and high balance loans. These changes include additional costs for new purchase loans and mortgage refinancing.

2. What are Loan Level Price Adjustments (LLPAs)?

LLPAs are additional fees based on specific loan characteristics such as property type, credit score, and loan-to-value (LTV) ratio. These fees are added at the time of loan origination and can impact the interest rate or closing costs.

3. Are there any exemptions from the high balance LLPA?

Yes, a high balance LLPA will not apply if at least one borrower on the loan is a first-time homebuyer and the total qualifying income of all borrowers is less than or equal to 100% of the area median income (AMI).

4. What is the new LLPA for cash-out refinance transactions?

Fannie Mae has introduced a new LLPA for all cash-out refinance transactions, regardless of the borrower’s occupancy status.

5. What is the minimum credit score required under the new Fannie Mae guidelines?

Fannie Mae has increased the minimum credit score requirement for all borrowers on all mortgage products to 620, effective May 1st, 2023.

6. What is the LLPA for loans with an LTV ratio greater than 95%?

A new LLPA has been introduced for loans with an LTV ratio greater than 95%. This adjustment applies to all mortgage products, irrespective of the borrower’s occupancy status.

7. Can borrowers avoid these new fees?

There may be strategies to avoid or minimize the impact of these new fees. For personalized advice and information on how to potentially avoid these fees, you can call 239-370-1513.

8. When did these changes take effect?

The changes, including the increased credit score requirement and new LLPAs, took effect on May 1st, 2023.

9. Who should I contact for more details?

For more information or to discuss how these changes might affect your mortgage options, call 239-370-1513.