FHFA Confirms GSEs' Guidance on Interested Party Contributions (IPCs), FHA Increases Allowable Fees for Assumable Loans, EPA Revises Lead Paint Disclosure Form
The Federal Housing Finance Agency confirms that buyers whose agent is compensated by the seller will continue to have access to financing through Fannie Mae and Freddie Mac. The Federal Housing Administration doubles the allowable fees mortgage servicers are allowed to charge when processing an assumable loan. The U.S. Environmental Protection Agency finalized revisions to the Buyer/Seller and Landlord/Tenant Lead-Based Paint Disclosure form.
1. FHFA Confirms GSEs' Guidance on Interested Party Contributions (IPCs)
The Federal Housing Finance Agency (FHFA) sent a letter to NAR confirming that both Fannie Mae and Freddie Mac published explicit confirmations on April 15, 2024, that buyers whose agent is compensated by the seller will continue to have access to financing through those institutions. Furthermore, so long as it remains "customary" by “local convention” for the seller to pay commissions, those will not be added to the interested party contributions (IPC) and subject to the caps on IPCs.
Interpretation of this rule under the proposed settlement was of great concern, and NAR wrote to Fannie Mae, Freddie Mac, and the FHA seeking confirmation of NAR's interpretation. In a letter to NAR, FHA confirmed that this interpretation does hold.
- FHFA's Letter to NAR
- Fannie Mae's Notice on Real Estate Commissions and Interested Party Contributions
- Freddie Mac's Guidance on Commission Paid to Real Estate Agents
2. FHA Increases Allowable Fees for Assumable Loans
The Federal Housing Administration (FHA) recently updated its policies by increasing the fees mortgage servicers are allowed to charge when processing an assumable loan.
Specifically, FHA doubled the allowable fees from $900 to $1,800. Government-insured mortgages have the unique feature of being assumable to homebuyers. Assumable loans create opportunities for those with FHA mortgages struggling to sell their homes in high interest rate environments, and consumers who wish to purchase but are sidelined because of higher monthly payments. However, many practitioners report delayed transaction times (often 30-60 days, or more), as the time and work needed to underwrite and process the assumption does not correlate to the amount servicers are able to charge.
NAR commends FHA for increasing the allowable fees, which will help facilitate the transaction and assist homebuyers and sellers. Read NAR's Letter to FHA
3. EPA Revises Lead Paint Disclosure Form
The U.S. Environmental Protection Agency (EPA) finalized revisions to the Buyer/Seller and Landlord/Tenant Lead-Based Paint Disclosure form. The changes will help agents and consumers fill out the form correctly, standardize responses, and reduce errors, thereby reducing agent liability.
The changes do not alter what information is required of agents or consumers—the form has been revised to improve and clarify how the information is conveyed. NAR staff has reached out to the EPA for any additional guidance on the changes to the form. Learn more about the new forms on US EPA webpage, Real Estate Disclosures about Potential Lead Hazards.