For people looking to buy a house, there is a change coming on May 1 that’s attracting a lot of attention and some confusion.While Loan Level Price Adjustments have been around for a long time, recent changes to them at the federal level are causing controversy, with some arguing that the change penalizes people with higher credit scores while giving an advantage to those with lower scores. The Federal Housing Finance Agency announced changes to the pricing structure in January, but they are slated to go into effect Monday. A spokesperson for the agency said it had been making changes over the last 18 months to take a more “holistic” approach to the pricing structure. “Some recent assertions have been made around our January pricing update that the updated pricing will penalize borrowers with good credit scores and subsidize borrowers with bad credit scores and that’s wrong,” said Michael Shemi, a Principal Advisor at the Federal Housing Finance Agency. “The new pricing has no incentive for bad behavior.”Shemi said that lower credit scores will still result in more upfront fees, despite the change. “Better credit equals better pricing,” he said.Cherie Hunt works with buyers and sellers in Northern California, primarily in the Sacramento region.She said she, and her clients, are monitoring the change, but that she doesn’t believe – at this point – it will have a drastic impact on the everyday buyers’ experience.“Don’t panic and don’t stop buying a house if you’re in the process and you can afford to do it,” she said. “Find out first, decide what’s right for your family, and then take the right steps.”The changes will apply to Freddie Mac and Fannie Mae loans.

For people looking to buy a house, there is a change coming on May 1 that’s attracting a lot of attention and some confusion.

While Loan Level Price Adjustments have been around for a long time, recent changes to them at the federal level are causing controversy, with some arguing that the change penalizes people with higher credit scores while giving an advantage to those with lower scores.

The Federal Housing Finance Agency announced changes to the pricing structure in January, but they are slated to go into effect Monday. A spokesperson for the agency said it had been making changes over the last 18 months to take a more “holistic” approach to the pricing structure.

“Some recent assertions have been made around our January pricing update that the updated pricing will penalize borrowers with good credit scores and subsidize borrowers with bad credit scores and that’s wrong,” said Michael Shemi, a Principal Advisor at the Federal Housing Finance Agency. “The new pricing has no incentive for bad behavior.”

Shemi said that lower credit scores will still result in more upfront fees, despite the change.

“Better credit equals better pricing,” he said.

Cherie Hunt works with buyers and sellers in Northern California, primarily in the Sacramento region.

She said she, and her clients, are monitoring the change, but that she doesn’t believe – at this point – it will have a drastic impact on the everyday buyers’ experience.

“Don’t panic and don’t stop buying a house if you’re in the process and you can afford to do it,” she said. “Find out first, decide what’s right for your family, and then take the right steps.”

The changes will apply to Freddie Mac and Fannie Mae loans.

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