Housing Policy Council: G-fee is a tax on homebuyers, refinancers

Joins chorus of voices opposed to raiding g-fees like a piggy bank

A growing number of voices in the housing industry want Congress to drop the plan the plan to redirect Fannie Mae and Freddie Mac g-fees to pay for highway repairs.


That's the fee Fannie Mae and Freddie Mac charge to guarantee home loans offered to investors on the secondary market.

Sens. Mike Crapo, R-Idaho, and Mark Warner, D-Va., object to the use of g-fees to offset the cost of a massive transportation bill.

The bill in question, called “The Developing a Reliable and Innovative Vision for the Economy Act” or the DRIVE Act, is a six-year highway authorization that will allow planning for important long-term projects around the country, and provides three years of guaranteed funding for the highway trust fund.

One of the ways the $47 billion bill is paid for is a significant delay to scheduled cuts in g-fees. The bill would delay a scheduled 10 basis point cut in g-fees from 2021 to 2025.

The Housing Policy Council has joined the chorus of industry voices against the move, saying they applaud an amendment by Senators Crapo and Warner to remove a provision from the Highway Bill, currently being considered in Congress, that would effectively be a tax on homebuyers and refinancers.

G-fees are paid for by consumers in the form of higher interest rates, hitting both new homebuyers and those refinancing current loans. 

HPC, along with other housing trade associations, sent a letter today to Senators Crapo and Warner supporting the amendment.

“G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans. Increasing g-fees for other purposes – even just extending the current fee increase for four years – effectively taxes potential homebuyers and consumers looking to refinance their mortgages,” the letter said. “…implementing yet another g-fee increase unrelated to housing needs will act to hinder the necessary reforms required of the GSEs in the years ahead.”

The full letter can be read here.

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