Loan-Level Price Adjustment (LLPA)

Updated 2026-05-17

A Loan-Level Price Adjustment (LLPA) is a fee charged by Government Sponsored Enterprise (GSE) and Government Sponsored Enterprise (GSE) to lenders for certain loan characteristics that present a higher risk profile. These adjustments are passed on to borrowers in the form of higher interest rates or upfront fees, reflecting the perceived risk of the loan.

Factors Influencing LLPAs

LLPAs can be influenced by various factors, including:

• Credit score
• Loan-to-value (LTV) ratio
• Property type
• Occupancy type
• Loan purpose (e.g., cash-out refinance)
• Debt-to-income (DTI) ratio

LLPA Waivers

In some cases, specific programs or borrower characteristics may qualify for an LLPA waiver. For example, Fannie Mae offers an LLPA waiver for first-time homebuyers who meet certain criteria, including those related to area-median-income-ami.

High-Cost Area Designation for LLPA Waivers

The determination of whether a property is in a high-cost or non-high-cost area can impact the eligibility for certain LLPA waivers. For the first-time homebuyer LLPA waiver, the applicable high-cost area designation depends on the loan application or casefile creation date:

• Before December 7, 2024: The 2024 high-cost or non-high-cost area designation applies.
• On and after December 7, 2024: The 2025 high-cost or non-high-cost area designation applies.

MLOs must be aware of these cut-off dates and the relevant area designations to accurately advise borrowers on potential LLPA waivers.

Source: LL-2024-03 Loan Limits 2025.pdf