Chris Salese: Napa’s Loan Ranger: What does the new refinancing tax mean to you? | Business
He went on to say, “and to codify several existing FHFA retention practices, including offering protections to small lenders and limiting future increases in certain high-risk lending practices.” The agreement “also sets out a plan for the Treasury, in consultation with the FHFA, to develop a proposal for further reform of the GSE”.
Yeah, a lot of stuff in there and it was announced at a time when there was really nothing else going on in the world. Insert more sarcasm.
Basically, while there was technically a press release, no one paid attention. Okay, fast forward to April 1.
It’s funny, because it’s a date we call April Fool’s Day. Regardless, starting April 1, Fannie and Freddie will limit the acquisition of single-family mortgages secured by second homes and investment properties to 7% of their volume.
What does this mean to you?
Well, industry professionals are trying to figure out exactly what the short and long term impacts are.
Some government regulations attempt to delay mandatory compliance with this rule. For now, the quick answer is that in order for lenders to comply with this new agreement, all second home and investment property loans have become more expensive in terms of cost and rate for you.