FHA Increases Allowable Fees for Assumable Loans

The Federal Housing Administration (FHA) recently updated its policies by increasing the fees mortgage servicers can charge when processing an assumable loan.

Specifically, FHA doubled the allowable fees from $900 to $1,800. Government-insured mortgages have the unique feature of being assumable to homebuyers. Assumable loans create opportunities for those with FHA mortgages struggling to sell their homes in high-interest-rate environments and consumers who wish to purchase but are sidelined because of higher monthly payments. However, many practitioners report delayed transaction times (often 30-60 days or more), as the time and work needed to underwrite and process the assumption does not correlate to the amount servicers can charge.

NAR commends FHA for increasing the allowable fees, which will help facilitate the transaction and assist homebuyers and sellers. Read NAR’s Letter to FHA.