How your credit score will affect your next mortgage starting May 1st, 2023

Starting May 1st, 2023, a new action by the current administration is looking to help subsidize mortgages for fair-credit borrowers.

How? Borrowers that have approximately a 680 or higher credit score will see increased fees to subsidize borrowers who are under a 680 score.

This will occur from by the Federal Housing Finance Agency (FHFA) making adjustments to the Loan-Level Price Adjustment (LLPA) matrix that lenders use when underwriting homebuyers. 

This isn't all too uncommon. Mortgage subsidies have played a significant role in the United States' history of housing policy. The Federal Housing Administration (FHA) was established in 1934 to provide mortgage insurance to lenders, encouraging them to offer affordable loans to a wider range of borrowers, particularly those with lower incomes and smaller down payments. This program helped spur homeownership rates and contributed to the growth of suburban communities. Additionally, the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac were created in the 1930s and 1970s, respectively, to provide liquidity to the mortgage market and further support homeownership. While these programs have had their share of challenges and controversies over the years, they have overall helped to make homeownership more accessible and affordable for many Americans.

For more information: Click Here

Looking to buy a home in the Lehigh Valley? Navigating through this current market may be challenging. For help, call today and receive a free consultation.