MPF Xtra Updates to Loan-level Price Adjustments
Effective Date: Immediately (unless noted within)
On November 4, 2022, Fannie Mae issued Lender Letter LL-2022-05, announcing the following loan-level price adjustments:
Waiver of LLPAs
All LLPAs will be waived for the transactions described below. Note that all requirements in the Lender Letter must be met, including the delivery of the applicable special feature code (SFC).
- HomeReady® loans
- Loans for first-time homebuyers with income at or below applicable area median income (AMI) limits
- Loans meeting Duty to Serve requirements*
- HFA Preferred™ loans
* To qualify for the LLPA waiver under the Duty to Serve section of LL-2022-05, the mortgage loan must:
- meet the additional loan requirements provided for in LL-2022-05 and the Fannie Mae Guides and
- be identified with SFC 874.
PFIs seeking the LLPA waiver for mortgage loans secured by rural properties based on the Small Financial Institution (SFI) exception must ensure the mortgage loan was originated, closed, and funded by a SFI, as defined by the FHFA. To confirm whether the originating institution meets the SFI definition, PFIs should refer to FHFA’s website that provides specific requirements and lists institutions that meet the SFI definition.
By delivering a mortgage loan with the SFC 874, the PFI represents and warrants the mortgage loan meets the applicable loan requirements and the SFI requirement (if applicable) in effect on the date of delivery to the MPF Program.
Effective Date: The waiver of LLPAs will be effective for all MPF Xtra mortgage loans funded by the MPF Program on or after December 2, 2022.
LLPAs for Cash-out Refinances
Fannie Mae included a grid with LLPAs for cash out refinances that will become effective in 2023. Note that some LLPAs are increasing but others are decreasing.
Effective Date: The updated LLPAs will be effective for all MPF Xtra mortgage loans funded by the MPF Program on or after February 2, 2023.
Any MPF Xtra loan that has not obtained funding confirmation on or before February 1, 2023 will be subject to the revised LLPAs.
To gain a full understanding of these topics, PFIs should review the entire Fannie Mae Announcement and any applicable Fannie Mae Selling Guide chapters, forms, or exhibits noted in the announcements.
- MPF Announcement 2022-56