Loan-Level Price Adjustment is a pricing adjustment made to a mortgage loan based on a borrower’s creditworthiness and other risk factors.

LLPA is charged by lenders and is not something new. It’s a very real cost that has been around for a while.

Our LLPA Pricing Comparison Tool shows the difference in the cost of a purchase loan based on the old LLPA pricing compared to the new pricing.

In the past, LLPA was primarily used to adjust the pricing of mortgages based on credit scores and loan-to-value ratio (LTV). However, with changes to the lending industry and new regulations, those costs have changed.

This pricing change goes into effect for all loans purchased by Fannie Mae after May 1, 2023. That being said, it’s important to note that most loans currently in underwriting and people who are currently preapproved have already been getting loan estimates, closing disclosures, and loan quotes that reflect the updated pricing.

The reason for this is because a loan is not purchased by Fannie Mae on the day it closes. For instance, if a borrower closes on his or her mortgage for the purchase of a home on April 24, 2023, Fannie Mae may not purchase that loan from the lender until after May 1, 2023. Remember that the new LLPA pricing change goes into effect for all loans purchased by Fannie Mae after May 1, 2023, even if the loan closed beforehand.

Many lenders began implementing the pricing changes in March and April of 2023.

It’s possible that many consumers will never see any of these costs itemized in their closing fees because the additional costs or savings could be absorbed via lower or higher interest rates.