Fannie Mae and Freddie Mac are tacking on a fee to refinance transactions, and major mortgage industry trade groups are upset.

The two GSEs announced their intent last week to charge a 0.5 percent fee on all refinance mortgages with a small carve-out for some single-family construction-to-permanent loans. The change takes effect on Sept. 1.

In its lender letter, Fannie Mae cited “market and economic uncertainty resulting in higher risk and costs incurred by Fannie Mae.” In its own announcement, Freddie Mac said its decision was driven by “risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty.”

While the refinance boom appears to be slowing down nation-wide, the planned change drew criticism from prominent banking groups.

“The pricing increase is particularly harmful for our nation’s low- and moderate-income homeowners and for the emerging, but unsteady improvements to the national economy,” a coalition of consumer and lending groups said. “The undersigned organizations strongly urge the Federal Housing Finance Agency, which had to approve this policy, to withdraw this ill-timed, misguided directive.”

The coalition includes: the American Bankers Association, the Center for Responsible Lending, the Credit Union National Association, the Independent Community Bankers of America, the Mortgage Bankers Association, the National Association of Home Builders, the National Association of Real Estate Brokers, the National Association of Realtors and the National Fair Housing Alliance, among others.

“Tonight’s announcement by the GSEs flies in the face of the administration’s recent executive actions urging federal agencies to take all measures within their authorities to support struggling homeowners,” Mortgage Bankers Association President and CEO Bob Broeksmit said in a statement. “The housing market has been able to withstand many of the most severe effects of the COVID-19 pandemic. The recent refinance activity has not only helped homeowners lower their monthly payments, but it is also reducing risk to the GSEs and taxpayers. At a time when the Federal Reserve is purchasing $40 billion in agency MBS per month to help reduce financing costs for mortgage borrowers to support the broader economy, this action raises those costs and undermines the Federal Reserve’s policy.”

Broeksmit said the charge could cost the average consumer $1,400 apiece and would penalize borrowers who did not lock in their rates even if they were just days from closing.

The Independent Community Bankers of America called the decision “contrary” to recent federal efforts to help the economy.

“By applying the fee retroactively to loans where the pricing is locked with consumers, FHFA and the GSEs will cause financial losses to those lenders who are struggling to comply with government mandated forbearance, loan workouts and modifications on all forms of credit in response to the COVID pandemic. This is the wrong action at precisely the wrong time,” the organization said. “ICBA urges FHFA and GSEs to rescind this destructive and unnecessary tax on homeowners immediately.”