ALTA, Other Trade Tell Congress G-fees Must not be Used as ‘Piggybank’

July 27, 2021

ALTA and several other housing trade organizations requested Congress refrain from using Fannie Mae and Freddie Mac's guarantee fees (g-fees) to help pay for any infrastructure package being negotiated in the Senate.

In a letter to Sens. Kyrsten Sinema (D-Ariz.) and Rob Portman (R-Ohio), the organizations wrote that g-fees should only be used as a critical risk management tool to protect against potential mortgage credit losses and to support the GSEs’ charter duties.

“Whenever Congress or the administration has considered using g-fees to cover the cost of non-housing-related programs, our organizations have united to emphatically let lawmakers know that homeowners cannot, and must not, be used as the nation’s ‘piggybank,’” the groups said. “We are united again to reaffirm our opposition to the Congress’s potential use of these fees for any funding offset that may be contemplated.”

Additionally, the letter points out that lawmakers should avoid taking steps that intensify housing affordability and limited supply, which could result in negative consequences for the economy.

“The unintended effects of any proposed g-fee increase or extension will be to raise the cost of homeownership for all Americans, and low- to moderate-income and underserved individuals in particular,” the letter states. “In addition, it would curtail refinance activity that helps to keep creditworthy borrowers in their homes. Moreover, implementing yet another g-fee increase will hinder policymakers’ abilities to execute the necessary reforms required of the GSEs in the years ahead.”

G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from loans that default. ALTA has opposed previous efforts to use g-fees to offset unrelated federal spending.


Contact ALTA at 202-296-3671 or [email protected].