Big news for buyers: Fannie Mae and Freddie Mac have announced changes to Loan Level Price Adjustments (LLPAs) on Conventional Loans, going into effect May 1, 2023. First-time homebuyers who meet income requirements are most likely to benefit.
What are LLPAs? These risk-based loan fees are charged to a borrower based on factors like credit score, loan type, occupancy type, and others. LLPAs on a Conventional Loan can impact your mortgage rate—for better or worse. If you’re a homebuyer who qualifies for newly reduced or waived LLPAs, you could see significant savings.
The LLPAs charged by Fannie Mae and Freddie Mac affect Conventional Loans and will not impact FHA, VA, and some Jumbo and specialty products. Fannie Mae and Freddie Mac also don’t back Non-Conforming Loans.