A Federal Housing Finance Agency rule to take effect on May 1 will increase the monthly mortgage for those with good credit scores.
The increased fee will subsidize those with bad credit scores.
The Biden administration believes the change will aid low-income home buyers, as equity is the foundation of the Federal Housing Finance Agency’s new rule.
The former Federal Housing Finance Agency director Mark Calabria stated, “The Biden administration is definitely trying to create more of a cross subsidy between good credit and bad credit, that’s the intent,” adding, “They are essentially trying to discriminate by race within the legal rules they have and minorities tend to have lower credit scores.”
Reporting from The Washington Free Beacon:
In short, riskier borrowers with low credit scores or income pay more each month for their mortgage. These borrowers will still pay more after May 1 but much less than they paid before. In order to compensate for that lost revenue, borrowers with strong credit will see their monthly increase to roughly $40 a month on a $400,000 mortgage. That’s an extra $14,400 over the course of a standard 30-year mortgage.
