What the new Adverse Market Refinance Fee means for homeowners


The Federal Housing Finance Agency (FHFA) announced that starting December 1, 2020 certain refinance loan types may be subject to an Adverse Market Refinance Fee. Which may impact the cost of refinancing for some homeowners.

Currently, the Adverse Market Refinance Fee will apply to all conventional, conforming mortgage refinances with loan balances over $125,000. A conforming mortgage is a home loan that is at or below a certain loan amount. This limit is the cap at which Fannie Mae and Freddie Mac are willing to buy or guarantee a loan. The limits change every year and vary by county.

Some mortgage loan types are exempt from this fee, including:

  • Home purchase loans
  • FHA, VA, and USDA refinances
  • Fannie Mae HomeReady® and Freddie Mac Home Possible® refinance programs
  • Conventional refinances with loan balances less than or equal to $125,000
  • Jumbo or non-conforming refinance loans

If your refinance is subject to the Adverse Market Refinance Fee, there could still be potential benefits to refinancing. Including:

  • Lowering your monthly mortgage payment
  • Lowering your interest rate
  • Removing private mortgage insurance (PMI)
  • Reducing the term on your loan and saving interest over the life of the loan

If you’re a homeowner wondering if it’s a good time to refinance your home, contact a trusted home loan professional. They can help evaluate your current mortgage and see if a refinance is beneficial to your individual situation.

Interested in learning more about refinancing options for your home? Contact an Evergreen loan officer near you.  

HomeReady® is a registered trademark of Fannie Mae. Home Possible® is a registered trademark of Freddie Mac.

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