fannie mae and freddie mac The government-sponsored enterprise (GSE) said in an announcement Monday that it will not count buyer’s agent fees as part of allowable interested party contributions (IPCs).
of GSE in the spotlight The guidance is not an update to the sales guide, but rather clarifies the treatment of real estate brokerage fees paid by sellers.
Under the sales guide used by the GSEs, property sellers are allowed to make financing concessions of up to 2% to 9% of the property price towards the borrower’s closing costs. “Fees and expenses customarily paid by real estate sellers pursuant to local custom are not subject to these financing concession limitations,” the GSEs noted in guidance released Monday.
“Buyer brokerage fees have historically been fees customarily paid by property sellers or the property seller’s real estate agent and are therefore currently excluded from these loan preference limits,” the statement reads. be. freddie mac.
The GSEs continue to state that these fees “will not be subject to loan concession restrictions if they continue to be customarily paid by the property seller in accordance with local practice.”
These explanations are National Association of Realtors (NAR) has reached a nationwide settlement agreement with plaintiffs in the Commission lawsuit. If the settlement is approved by the court, agents and home sellers cannot post offers of compensation on the MLS, but home sellers can offer to cover the buyer’s agent fees if they wish. can.
In late March, with NAR Mortgage Bankers Association (MBA) I sent a letter to Federal Housing Finance Agency (FHFA) Director Sandra Thompson, Fannie Mae CEO Priscilla Almodovar, Freddie Mac CEO Michael DeVito, federal housing administration (FHA) Secretary Julia Gordon is asking the agency to review the IPC’s treatment of home purchase transactions.
In recent episodes, Next Home On CEO James Dwiggins and Chief Strategy Officer Keith Robinson’s “Real Estate Insiders Unfiltered” podcast, NAR President Kevin Sears said Gordon told him that sellers should follow FHA policy. The company announced that it had received confirmation that it would be fine to continue paying the buyer’s brokerage fees and commissions as a matter of national etiquette. Where local laws and customs must be followed and these costs are reasonable in amount, existing policy does not treat those payments as contributions from interested parties.
NAR also US Department of Veterans Affairs It has asked for similar guidance for VA loans, but Sears said it has not yet received a response to that letter.
of Regional Home Lenders Association (CHLA) expressed support for the GSE’s announcement.
“CHLA appreciates Fannie Mae’s clarification today that seller payments of buyer real estate agent fees do not count toward the seller concession cap,” the spokesperson wrote in an email. “In December, CHLA, along with all federal mortgage program regulators, sent a letter to Fannie Mae in response to real estate agent lawsuits that could shift buyer broker liability from real estate agents to purchasing agents. We called for exactly this kind of measure to protect first-time home buyers.”
of American Association of Realtors The Emerging Industry Association (AREA) was also pleased with Monday’s announcement.
“Today’s statement regarding seller fee coverage was well received,” AREA co-founder Jason Haber wrote. “Next, we expect Fannie to offer a similar framework to her purchasers. Does a purchaser’s own professional payments for her services count towards her IPC cap? That is an open question at this time The question remains.”
