WASHINGTON—NAFCU, CUNA and 23 other trade organizations have written to the Senate amid its negotiations on the Bipartisan Infrastructure Framework to urge against using guarantee fees (g-fees) from Fannie Mae and Freddie Mac as a source for funding offsets.
"As representatives of institutions that span the entire housing finance ecosystem, we firmly believe that g-fees should only be used as originally intended: as a critical risk management tool to protect against potential mortgage credit losses and to support the GSEs' charter duties," the organizations wrote.
The letter states that g-fees were previously raised 10 basis points over 10 years to fund a two-month period of payroll tax relief in 2011, which harmed homebuyers and will continue to do so until the provision expires in September.
"G-fees are a critical risk management tool used by the GSEs to cover operating costs and losses that occur in their operations," the letter reads. "Increasing g-fees for other purposes effectively taxes potential homebuyers, as well as existing homeowners seeking to refinance their mortgages. It is important to note that g-fees are included within the cost structure of all mortgages, including those for first-time homebuyers, veterans, and rural communities.
"Given today’s housing affordability and supply constraints, lawmakers must avoid taking any steps that may exacerbate affordability challenges, which could in turn have negative consequences for the broader economy,” the groups concluded.