On October 28, 2024, the FHFA announced updates to several Fannie Mae and Freddie Mac policies that are intended to enhance efficiencies and promote cost savings in the single-family mortgage market. FHFA Director Sandra Thompson stated that the actions are intended to better ensure the Enterprises are reliable sources of liquidity for lenders of all sizes and types, which in turn will promote access to sustainable credit for consumers.
According to the FHFA’s news release, the policy updates are the result of robust engagement with public- and private-sector stakeholders and cover four key policy areas:
Expanded eligibility for appraisal waivers on purchase loans. In support of FHFA’s appraisal modernization, the Enterprises will expand eligibility for appraisal waivers, benefiting more borrowers, especially first-time and low- to moderate-income borrowers. The maximum loan-to-value (LTV) ratio for purchase loans eligible for appraisal waivers will rise from 80% to 90%, and for inspection-based waivers from 80% to 97%. The Enterprises will implement risk management controls to ensure safety and soundness.
Expanded Uniform Appraisal Dataset (UAD) to include Federal Housing Administration (FHA) data. In partnership with the Department of Housing and Urban Development, FHFA will significantly expand the UAD to include appraisal data from applications for FHA-insured loans.
Expanded eligibility for Freddie Mac performing loan repurchase alternative pilot. Freddie Mac is expanding its pilot program for a fee-based alternative to repurchase requests for performing loans with defects to all approved lenders. Lenders can opt-in annually, and those not participating can choose a “Fee Only” option, where a fee is charged for the defective loan instead of a repurchase. This aims to better align repurchase alternatives across the Enterprises.
Advance notice of certain Enterprise pricing increases. For loans via the mortgage-backed security (MBS) swap channel, the Enterprises will give 60 days' notice for base guarantee fee increases over 1 basis point, ensuring operational flexibility while providing lenders with pricing certainty.
Read the FHFA’s press release here.