FHFA LLPA Changes 2026: What Changed in 2023 and How Pricing Works Now

FHFA implemented significant changes to the LLPA pricing matrix effective May 1, 2023. The changes generated substantial public controversy, particularly around the perception that lower-credit borrowers were being subsidized by higher-credit borrowers. Here is what actually changed and what the current matrix looks like for MLOs operating in 2026.

Key Changes from May 2023

• ✦First-time homebuyers at or below 100% AMI: LLPAs eliminated for certain loan-to-value combinations, reducing cost for lower-income first-time buyers
• ✦Higher-credit, higher-down-payment borrowers: LLPAs increased in certain scenarios (particularly 60% to 80% LTV at higher FICO scores for investment properties and second homes)
• ✦New DTI-based LLPA: a borrower with DTI above 40% and FICO below 740 now carries an additional LLPA that did not exist pre-2023
• ✦Cash-out refinance LLPAs: restructured and generally increased across most credit score buckets

What Did Not Change

The core structure of the LLPA matrix (FICO cross-referenced against LTV) remains intact. The fundamental principle of higher risk equals higher fee did not change; the specific dollar amounts at certain intersections shifted. Most primary residence purchase borrowers with FICO at or above 720 and LTV at or below 80% saw minimal net change in their effective pricing.

High-Balance LLPA

Loans above the standard conforming limit but within the high-cost area conforming limit carry a separate high-balance LLPA. This fee is in addition to all other LLPAs and is uniform across credit score buckets. It applies to both purchase and refinance. High-balance LLPAs are one reason jumbo pricing can sometimes be competitive with high-balance conforming pricing for strong borrowers.

Monitoring for Future Changes

FHFA has authority to adjust LLPAs at any time. Changes are announced through FHFA bulletins and Fannie Mae Selling Guide updates. The 2023 change created significant MLO and consumer confusion because rates did not change uniformly in response. Subscribe to Fannie Mae and Freddie Mac lender bulletins directly to stay current on LLPA adjustments as they happen.