Fannie Mae and Freddie Mac may or may not need a government bailout, but the turmoil surrounding the mortgage-finance companies' decline has already meant four things for borrowers: higher interest rates, more fees and closing costs, bigger down payments and fewer loan choices.

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Jeff Jaye, a Northern California mortgage broker, used to rely on homeowners looking to refinance their loans for more than two-thirds of his business. Today, he rarely bothers with those applications because he knows most homeowners can’t qualify for a new loan.

Fannie Mae and Freddie Mac may or may not need a government bailout, but the turmoil surrounding the mortgage-finance companies’ decline has already meant four things for borrowers: higher interest rates, more fees and closing costs, bigger down payments and fewer loan choices.

Lenders who must satisfy the requirements of Fannie Mae and Freddie Mac — the dominant buyers of U.S. mortgage debt — are now demanding bank statements, big cash reserves and second appraisals before they approve a loan to refinance a home.

“The lenders are making it so difficult to qualify,” said Jaye, who now mainly works with homebuyers snapping up foreclosed properties and homes selling for deep discounts. “I know everybody’s scared right now, but it’s just so over the top.”

Mortgage rates hover around 6.6 percent, about last year’s level. But if investors weren’t so nervous, rates would be about 1 percentage point lower, based on historical comparisons.

“Mortgage debt is viewed as much riskier now than it was a couple of years ago during the housing boom,” said Greg McBride, senior financial analyst at Bankrate.com.

A borrower with a $1,170 monthly payment for a $200,000 loan would now only be able to afford a $180,000 loan, McBride calculated, though lower home prices could still make the house affordable.

Borrowers are also paying higher rates and fees because Fannie and Freddie are trying to raise revenue and stem losses.

Earlier this month, Fannie said it will double the fee it charges lenders and brokers to 0.50 percent from 0.25 percent beginning Oct. 1.

For a $300,000 loan, that could work out to an extra $750 in closing costs, for example.

Fannie and Freddie have little choice. The two companies lost a combined $3.1 billion between April and June.

Half of their credit losses came from Alt-A loans, made to borrowers with solid credit but little proof of their incomes, or small or no down payments.

Fannie said it will stop buying Alt-A loans, and both Fannie and Freddie have raised the standards for loans they will buy.

Around the country, borrowers like Cathi Parson are feeling the pinch.

Parson, 49, a hospital administrative assistant, is facing the prospect of asking her mother for help with a down payment. She plans to sell her home in Texas and return to her native California later this year.

She wants to buy a house for up to $400,000 and expects to bring a down payment of around $50,000, or about 12 percent.

“Probably about a year ago, that would have been fine,” Parson said.

Now, with credit far tighter, she will have far fewer options from which to choose.

“The tightening of the guidelines by Fannie Mae and Freddie Mac as a result of the mortgage collapse have had a rippling effect with all lenders and all loan types,” said her mortgage broker, Sandy Awty. “It’s just adversely impacted everyone.”

Everyone including investors. As the stock prices of Fannie and Freddie keep sinking, people in the real-estate industry and Wall Street alike are trying to figure out whether the government will be forced to shore up one or both companies.

“It’s very difficult to imagine a scenario in which the federal government doesn’t step in,” said Jack Foster, managing director of Franklin Templeton Real Estate Advisors.

It’s unclear what that would mean for borrowers and taxpayers, and government officials aren’t providing clues.

Treasury Secretary Henry Paulson on Tuesday refused to discuss this week’s plunge in shares of Fannie and Freddie.

He also declined to answer questions about whether the administration will use authority it received from Congress last month to lend to Fannie and Freddie or buy their stock to bolster their financial positions.

The most recent burst of fear about the pair’s future came Monday, after a Barron’s magazine article over the weekend, citing an anonymous Bush administration source, reported that the government is pressing the companies to raise more money to guard against losses, but doesn’t expect the companies to succeed.

The Barron’s report said the government is likely to buy preferred stock in the companies, wiping out common shareholders.

Already, those investors have seen the value of their shares slashed by more than 85 percent this year.

Associated Press reporter Martin Crutsinger in Washington, D.C., contributed to this story.