Biden admin rule will hike rates on homebuyers with good credit to subsidize riskier loans

The Biden administration will soon implement a rule requiring homebuyers with good credit to pay higher mortgage rates in order to subsidize those with poor credit.

The Federal Housing Finance Agency's new rule will take effect on May 1 and only impact those buying houses or refinancing after that date, according to the Washington Times.

Federal Housing Finance Agency Director Sandra Thompson said the change would "increase pricing support for purchase borrowers limited by income or by wealth," per the outlet, and would only result in "minimal" fee changes.

"The changes do not make sense. Penalizing borrowers with larger down payments and credit scores will not go over well," Bay Equity Home Loans senior loan officer Ian Wright told the Times. "It overcomplicates things for consumers during a process that can already feel overwhelming with the amount of paperwork, jargon, etc. Confusing the borrower is never a good thing."

"I am all for the first-time buyer having a chance to get into the market, but it’s clear these decisions aren’t being made by folks that understand the entire mortgage process," he added.

Government-supported housing companies Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) will oversee the price adjustments.

Ben Whedon is an editor and reporter for Just the News. Follow him on Twitter.