Freddie Mac & Fannie Mae Commission Cap Announcement

The  mortgage giants say commission concessions for buyer agents won’t count towards IPCs (allowable interested party contributions, or concession caps as they’re commonly known),.

Freddie and Fannie are Government-Sponsored Enterprises (GSEs) with a vested interest in helping buyers schieve their homebuying goals. In the face of probable commission payment changes forced by the class action settlement involving NAR (National Associattion of Realtors). they clarified their policies on treatnebt if seller-funded real estate agent commissions.

The existing selling guides note that property sellers are permitted to make financing concessions toward the borrower’s closing costs, but max out at 2% – 9% of the property’s value. This week, they clarified that “fees or costs customarily paid by the property seller according to local convention are not subject to those limits.

The NAR settlement must approved by the court before changes are instituted. The new rules state that offers of commission may not be listed in the MLS. Home sellers may still compensate buyers’ brokers with offers listed elsewhere, or negotiated as part of the transaction.

For more information, see our post on Agent Commission and DC Home Buyers, as well as our page on agnet commissions.

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