The interest rate environment will, net of this one-time fee, still make purchasing a home this December much cheaper than it was last year at the same time. (3

The interest rate environment will, net of this one-time fee, still make purchasing a home this December much cheaper than it was last year at the same time. (3.1% versus 3.9% for a 30 year fixed.) Credit quality has declined because some borrowers in the population have unobservable risks due to the coronavirus impact on the economy. Someone has to pay for that. Borrowers are the obvious choice. To the extent that borrowers have visible risk characteristics, they pay directly; you can (incredibly) still sell Fannie Mae loans which are in covid-related forbearance, but they'll want a 5 to 7% discount on these. (For a full table of Loan Level Price Adjustments: https://singlefamily.fanniemae.com/media/9391/display https://singlefamily.fanniemae.com/media/9391/display ) The wealthy generally do have many options on what to do with their money, which presumably includes hiring a financial advisor who could tell them that the interest spread between a conforming loan and a non-conforming loan is far higher than the impact of ~0.5 points. (A "point" in mortgage parlance is a one-time fee due at loan signing; the primary use of them is "Pay points to buy down your interest rate." Fannie Mae decreasing the amount they'll pay your mortgage provider for the mortgage sold to them implies that the same mortgage available post the fee would cost you Fannie Mae's fee in points.)