Fannie Mae Selling Guide C3-3-03 — Buying Up and Buying Down the Guaranty Fee for MBS

Fannie Mae Selling Guide C3-3-03 — Buying Up and Buying Down the Guaranty Fee for MBS

C3-3-03, Buying Up and Buying Down the Guaranty Fee for MBS (05/07/2025) Introduction This topic contains information on buying up and buying down the guaranty fee for MBS, including: Guaranty Fee Buyup Maximums and Buydown Minimums for Fixed-Rate Mortgages Eligibility Requirements for ARM Guaranty Fee Buyups and Buydowns Guaranty Fee Buyup Maximums and Buydown Minimums for ARMs Guaranty Fee Buyup Maximums and Buydown Minimums for Fixed-Rate Mortgages The maximum guaranty fee buyup amount is stated in the lender's MBS commitment. The guaranty fee cannot be bought down to a number less than zero. Eligibility Requirements for ARM Guaranty Fee Buyups and Buydowns A lender may buy up or buy down the guaranty fee remittance for MBS pools consisting of adjustable-rate mortgages (ARMs) originated under any standard ARM plan, as long as the mortgages meet the following eligibility criteria: The guaranty fee rate may be bought up or bought down in increments of 0.0001% (one one-hundredth of a basis point). Any buyup or buydown of the guaranty fee remittance rate for adjustable-rate MBS pools must be calculated on the reduced guaranty fee remittance rate that applies to this type of remittance cycle. Guaranty Fee Buyup Maximums and Buydown Minimums for ARMs The weighted-average coupon of the pooled mortgages must not exceed the following limits: 1.000% (100 basis points) higher than the accrual rate (the pass-through rate) for the pool as of the issue date for mortgages originated under most ARM plans; or 0.875% (87.5 basis points for mortgages originated under ARM plans that have initial fixed-rate periods of 3, 5, 7, or 10 years). The recommended maximum allowable interest rate is 100 basis points (1%) over the minimum allowable interest rate. Published May 6, 2026 994 Additionally, for all ARM plans, the guaranty fee buyup is limited to 0.25% (25 basis points). The guaranty fee cannot be bought down to a number less than zero. Recent Related Announcements The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SEL-2025-03 May 07, 2025 Announcement SEL-2019-04 May 01, 2019 Chapter C3-4, Pooling Loans into Fixed-Rate MBS Introduction Lenders can pool mortgages into one of two types of MBS: fixed-rate MBS and ARM MBS. This chapter provides information on pooling loans into fixed-rate MBS, which includes UMBS.

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