While the FHA anti-flip waiver was being extended in hopes of strenthening the housing market, policymakers have raised the cost of homeownership for buyers in order to pay for the payroll tax holiday.
This 10-basis-point increase in the G-fees (guarantee fees) levied on Fannie Mae and Freddie Mac transactions will add thousands of dollars to buyers' loans over the life of their mortgages. The new fees will not be used to mitigate risk, which is the purpose of guarantee fees. Instead, this new tax exacted for 30 years on nearly every borrower for the next 10 years will go straight to the U.S. Treasury to fund the two-month extension of the payroll tax holiday.
The bill also raises the annual insurance premium borrowers pay on FHA loans by one-tenth of a percent and will make it more difficult for Congress to shut down Freddie Mac and Fannie Mae.
The FHFA can phase the fee in over two years.
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