Saturday, October 1, 2011

USDA Rural Development Implements Annual Fee

*** UPDATE - Effective 12/7/2011 USDA SFH has announced the Upfront Guarantee Fee will increase from 1% to 1.5% ***

Effective today mortgage loans granted by USDA Rural Development, aka Guaranteed Rural Housing Loan Program, will carry an annual fee in addition to the upfront guarantee fee. The upfront fee will decrease from 3.5% of the loan amount to 2% on purchases and remains at 1% for streamline refinances. The annual fee will be assessed at .3% of the principal balance of the loan beginning with the original loan amount in the first year and recalculated each year thereafter for the life of the loan. Borrowers will pay a monthly installment to the lenders who will in turn pay the annual fee to USDA. The USDA Rural Development loan remains a viable option for home buyers seeking to purchase a home with little to no down. The mortgage program is income contingent and only available in eligible areas. To apply for this or any other loan program contact me today.

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