Upfront and Monthly/Annual Fees Decreased Effective October 1, 2016
USDA has announced a reduction in both the upfront guarantee fee and monthly/annual fee for fiscal year 2017, effective with Conditional Commitments issued on or after October 1, 2016 through September 30, 2017. Effective at the start of the fiscal year of 2017 (October 1, 2016) program fees for USDA Rural Development’s guaranteed home loan program will be significantly reduced. The upfront guarantee fee will decrease from 2.75% to 1.0% of the loan amount. The annual fee will change from 0.50% to 0.35% of the average scheduled unpaid principal balance for the life of the loan.
$300K purchase price at 3.25% under old structure:
- $308,250 loan amount
- P&I payment = $1,341.52
- MI payment = $127.27
- 4.039% APR
.
$300K purchase price at 3.25% under new structure:
- $303,000 loan amount
- P&I payment = $1,318.68
- MI payment = $87.57
- 3.737% APR
For information about USDA Loans Click Here