A risk-based alternative to the GSE guarantee fee, priced on the credit risk of your loans.
More on our risk-pricing principles.
AgencyAlpha premiums are priced on Arch's risk-based pricing model — not congressional taxes, cross-subsidies, or GSE overhead. The GSE G-fee (65.2 bps average) is a bundle: a Congressional tax remitted to Treasury under TCCA 2011, actual credit risk, cross-subsidy from higher-FICO to lower-FICO borrowers, a liquidity premium on the GSE's MBS guarantee, and GSE overhead and profit. AgencyAlpha prices the loan, not the system — and comes in up to 68 bps below the all-in G-fee across credit tiers and LTV bands.
Compare GSE G-fee to AgencyAlpha pricing →Loss severity on fully documented conforming loans has not exceeded 50% LTV — even in the worst historical markets. So AgencyAlpha's coverage formula tracks that: Coverage % = (Current LTV − 49.99%) / Current LTV. As the borrower builds equity, less insurance is needed; coverage — and the premium base — shrinks every month, with a hard cliff at 50% LTV. You stop paying for risk that no longer exists.
See the loss-severity data →Default risk peaks in years 3–5 and approaches zero after year 10. A 10-year policy term matches that curve precisely — instead of a GSE structure that collects an average of 651 bps across years 11–30 of a loan's life, long after the risk it's pricing has largely disappeared.
Track coverage duration to risk duration →Compare the GSE and AgencyAlpha pricing models.
Two scenarios, line by line: an owner-occupied conforming loan, and a second-home / non-owner-occupied pool.
| Line item | GSE | AgencyAlpha |
|---|---|---|
| Notional / Par | $1,000,000,000 | $1,000,000,000 |
| Insurance cost / yr | −0.71% | −0.33% |
| Base RBC factor | 0.16% | 0.68% |
| Diversification factor | 75% | 75% |
| Target RBC ratio | 500% | 500% |
| Required capital ratio | 0.53% | 2.55% |
| Cost of capital | 5% | 5% |
| Capital charge % | 0.03% | 0.13% |
| Line item | GSE | AgencyAlpha |
|---|---|---|
| Insurance cost / yr | −1.05% | −0.51% |
| Base RBC factor | 0.16% | 0.68% |
| Diversification factor | 75% | 75% |
| Target RBC ratio | 500% | 500% |
| Required capital ratio | 0.53% | 2.55% |
| Cost of capital | 5% | 5% |
| Capital charge % | 0.03% | 0.13% |
Return and capital figures are illustrative and derived from a model that relies on stated assumptions, including risk-based capital factors, diversification factors, target capital ratios, cost of capital, and guarantee-fee inputs. Results are highly sensitive to these assumptions, which vary by institution. Certain analyses are based on a limited loan sample that may not be representative.
The data behind our 50% loss-severity cliff.
Even at the worst points of the 2008 crisis, loss severities on ≤80% LTV loans peaked in the mid-40s%, never crossing the 50% coverage line AgencyAlpha is built around.
Sources: Goodman & Zhu, "Loss Severity on Residential Mortgages," Urban Institute Housing Finance Policy Center / Journal of Fixed Income, 2015, Freddie Mac loan-level data. An & Cordell, Philadelphia Federal Reserve Working Paper, March 2019.
Historical loss severities reflect specific datasets and time periods and are not a guarantee of future performance. Future severities may exceed historical levels.
Our pricing matches coverage duration with risk duration.
Default risk peaks in years 3–5 and approaches zero after year 10 — a 10-year policy term tracks that curve, instead of a GSE structure that keeps collecting an average of 65 bps across years 11–30, long after the risk has largely disappeared.
Source: Single-Family Guarantee Fees Report, FHFA, 12/22/25. Data is average for 2024.
AgencyAlpha is less than the G-fee for every credit tier and LTV band.
The AgencyAlpha premium runs up to 68 bps below the all-in G-fee, across the full range of credit tiers and LTV bands.
Source: Arch MI analysis. G-fee calculation includes LLPA allocation.
See AgencyAlpha pricing for your portfolio.
Request PricingBuilt for GSE-eligible conforming loans, 50%–80% LTV, credit score 620+.