Having Good Credit Is Bad Now

Starting in May, a new federal rule in the US aims to close the racial homeownership gap and get more first-time and low-income buyers into the housing market, by upending the current structure of the Loan-Level Price Adjustment (LLPA) matrix. Homebuyers with a good credit score could see their monthly mortgage payment rise by over $60 a month, while riskier borrowers will get more favourable mortgage terms because their fees were reduced. Only about 25 percent of homebuyers with Federal Housing Administration loans are people of colour, according to the White House, and black and Hispanic people tend to have lower credit scores and fewer savings to use as a down payment on a home. Critics have called the new rule unfair and potentially ineffective.

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