The average single-family guarantee fees charged by Fannie Mae and Freddie Mac fell 2 basis points in 2016 to 57 basis points, the Federal Housing Finance Agency reported today. Upfront guarantee fees (which are based on credit risk attributes) remained unchanged at 16 basis points, while ongoing guarantee fees (which are based on the product type) fell from 42 basis points to 40.
The decrease in g-fees was driven by increased competition in the housing market over the past year. As a result of the decreases, FHFA last July established a minimum for ongoing g-fees to help maintain the safety and soundness of the GSEs.
