What's a G-Fee?

You may have seen NAR's Call to Action hit your inbox yesterday asking you to take action regarding a proposal using g-fees to fund transportation programs. Here is a little clarification on what exactly a g-fee is and NAR's position on why it's important to not use g-fees to fund transportation...





What is a Guarantee Fee (g-fee)?
  • GSE guarantee fees are charged by Freddie Mac and Fannie Mae to lenders for bundling, selling, and guaranteeing the payment of principal and interest on their Mortgage Backed Securities
  • Most of the guarantee fee covers projected credit losses from borrower defaults over the life of the loans, administrative costs, and a return on capital.
  • Besides protecting against credit-related losses, these fees also cover internal expenses for such services as:
 
NAR Position:
  • The National Association of REALTORS® strongly opposes the use of guarantee fees for any non-housing purposes.
  • Use of g-fee revenue to fund transportation programs saddles future homeowners with an unnecessary long-term burden
  • Use of g-fee revenue to fund transportation programs prevents Fannie Mae and Freddie Mac from effectively managing their risk.
 
 
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Letters that NAR has sent regarding this proposal:

House Letter

Coalition Letter
 
 
 

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