The Federal Housing Finance Agency (FHFA) has recently announced a significant decision to remove a contentious loan-level pricing adjustment (LLPA) that directly affected conventional borrowers with debt-to-income (DTI) levels at or above 40%. Originally slated for implementation on May 1, 2023, the DTI LLPA faced strong opposition from various stakeholders in the mortgage industry, including the influential Mortgage Bankers Association (MBA). In response to these concerns, the FHFA has rescinded the implementation to address the feedback received from industry participants. 

LLPAs for higher DTI would add costs to the loan for those with higher DTIs. The higher the DTI, the more costs added to the loan/rate which would make it harder for those with tighter margins to qualify.

FHFA’s Commitment to Transparency and Inclusivity 

Sandra L. Thompson, Director of the FHFA, expressed appreciation for the valuable feedback provided by the mortgage industry and other market participants regarding the challenges associated with implementing the DTI ratio-based fee. Recognizing the importance of an ongoing dialogue, Thompson emphasized the FHFA’s commitment to enhancing transparency in the process of establishing the single-family guaranteed fees for the Enterprises. The agency intends to seek public input on this matter, demonstrating its dedication to inclusivity and the incorporation of diverse perspectives. 

Request for Information on Additional Fees 

In addition to eliminating the highly debated LLPA, the FHFA has initiated a request for information regarding additional new fees. This request specifically focuses on fees that may be imposed on borrowers with higher credit scores and moderate down payments. By actively seeking information and input on these potential fees, the FHFA aims to gather valuable insights and considerations from industry experts and stakeholders before making any further decisions. 

What This Means for Borrowers and The Mortgage Industry

The FHFA’s decision to eliminate the LLPA is significant for borrowers with higher DTI ratios, who would have had to pay an additional fee on their loans. The FHFA’s commitment to transparency and inclusivity is also a positive step towards creating a more equitable mortgage industry. By seeking public input on the establishment of single-family guaranteed fees for the Enterprises, the FHFA is demonstrating a commitment to incorporating diverse perspectives and ensuring that all stakeholders have a voice in the process.

The request for information on additional fees is also an important step in ensuring that any new fees imposed by the FHFA are carefully considered and evaluated. By gathering insights and considerations from industry experts and stakeholders, the FHFA can make informed decisions that benefit borrowers and the mortgage industry as a whole.


The FHFA’s decision to eliminate the LLPA and seek public input on the establishment of single-family guaranteed fees is a positive step towards promoting transparency, inclusivity, and equity in the mortgage industry. By eliminating fees that disproportionately impact borrowers with higher DTI ratios, the FHFA is taking an important step towards promoting homeownership and ensuring that all borrowers have access to affordable loans.