FHFA Eliminates Adverse Market Refinance Fee

On July 16, 2021, the Federal Housing Finance Agency (“FHFA”) announced the elimination of the “Adverse Market Refinance Fee” it instituted to cover projected losses as a result of the COVID-19 pandemic for loans delivered on or after August 1, 2021. The .5% fee has been imposed by the FHFA since December on all refinance loans delivered to Fannie Mae or Freddie Mac.

After the fee was announced last fall, the FHFA received significant backlash from the mortgage industry for increasing costs to borrowers hoping to take advantage of record-low rates by refinancing their loan and lowering their monthly payments. The FHFA announcement emphasized the assistance the elimination of this fee will provide struggling borrowers.

"The COVID-19 pandemic financially exacerbated America's affordable housing crisis. Eliminating the Adverse Market Refinance Fee will help families take advantage of the low-rate environment to save more money," said Acting Director Sandra L. Thompson.

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