Washington, D.C. – As required by the Housing and Economic Recovery Act of 2008, the Federal Housing Finance Agency (FHFA) today released its annual report on the single-family guarantee fees charged by Fannie Mae and Freddie Mac (the Enterprises).  The report discusses guarantee fees charged in 2016 and provides a five-year perspective with data back to 2012. 

The major findings of the report include:

• For all loan products combined, the average single-family guarantee fee fell in 2016 by 2 basis points from 59 basis points to 57 basis points.  The decline in fees was due to competitive pressures between the Enterprises, and less because of changes in the product type mix from 2015.
  
• The average guarantee fee in 2016 on fixed-rate, 30-year loans fell by 2 basis points to 61 basis points; the fee on fixed-rate, 15-year loans fell by 4 basis points to 37 basis points; and the fee on adjustable-rate mortgage loans remained steady at 59 basis points.
  
• In 2016, extra-small lenders paid, on average, 2 basis points less than extra-large lenders in total guarantee fees.  Guarantee fees among the size groups have been comparable, with only small differences in any year since 2013.
  
• Based on quarterly monitoring of guarantee fees, FHFA issued direction to the Enterprises in July 2016 to set minimum ongoing guarantee fees by product type, effective in November 2016, consistent with our responsibility to ensure safety and soundness. 
  

The Housing and Economic Recovery Act of 2008 requires FHFA to submit a report to Congress annually on guarantee fees.  Guarantee fees are intended to cover the costs the Enterprises incur for guaranteeing the payment of principal and interest on single-family loans they acquire from mortgage lenders.  These costs include projected credit losses from borrower defaults over the life of the loans, administrative costs, and a return on capital. 

Link to Report