Subsidizing High-Risk Homebuyers

Please note that not only will banks offer Subsidies to High-Risk Homebuyers, it will be at the expense of those with better credit scores. 

Fannie Mae and Freddie Mac will enact changes to fees known as loan-level price adjustments (LLPAs) on May 1 that will affect mortgages originating at private banks nationwide, from Wells Fargo to JPMorgan Chase, effectively tweaking interest rates paid by the vast majority of homebuyers.

The result, according to industry pros: pricier monthly mortgage payments for most homebuyers — an ugly surprise for those who worked for years to build their credit, only to face higher costs than they expected as part of a housing affordability push by the US Federal Housing Finance Agency.

"It's unprecedented," added David Stevens, who served as Federal Housing Administration commissioner during the Obama administration. "My email is full from mortgage companies and CEOs [telling] me how unbelievably shocked they are by this move." 

Under the new rules, high-credit buyers with scores ranging from 680 to above 780 will see a spike in their mortgage costs – with applicants who place 15% to 20% down payment experiencing the biggest increase in fees.