Avoid these increases by getting a conventional or FHA loan
Fannie Mae and Freddie Mac are both toughening their credit score and down-payment rules as of April 1.
In response, major lenders are already factoring in the higher fees, which reduces the effectiveness of the stimulus efforts.
Under the new guidelines:
Buyers with down payments of less than 25 percent will be charged a three-quarter point add-on penalty, no matter how high their credit score;
Buyers of duplexes, where one unit is owner-occupied and the other is rented, will be charged a 1 percent add-on;
Refinancers who take cash out will be charged as much as three points if they have a low to moderate equity stake.
Freddie spokesman Brad German says the loan categories and credit risk combinations targeted by these fees “default at four-to-eight times” the rate of other mortgages backed by Freddie. “We have to manage these risks appropriately,” he says.
