Currently Rural Housing loans have no monthly mortgage insurance but that will change on or after October 1st 2011. A Rural Housing loan is a mortgage program favored by first time home buyer because of the no down payment requirement. Rural Housing loans, or as sometimes called USDA loans, have always had an upfront fee but never a monthly fee. This will change October 1st or soon thereafter as announced in Administrative Notice # 4551. The Secretary of the United States Department of Agriculture (USDA) granted Rural Housing the right to establish an annual fee, not to exceed .5%, for the purpose of keeping the Rural Housing subsidy neutral i.e. no tax payer support.
An annual fee, which is escrowed monthly from the home buyer, of .3% is required for fiscal year 2012 in order to be tax payer neutral. As far as monthly mortgage insurance goes it is by far the least expensive for any program that has monthly mortgage insurance. This will cost the home buyer an extra $25.00 per month for a $100,000 mortgage. In contrast the monthly mortgage insurance for an FHA loan, which requires a down payment, would be $95.83, almost 4 times higher.
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Who Can You Call For Your Mortgage Needs in North Carolina?
Call Shay Campbell a licensed Loan Officer, NMLS# 46083 and LO5 designation, located in the Triangle area of NC, which includes Raleigh, Cary, Durham, Chapel Hill, Apex, Holly Springs, RTP and the counties of Wake, Durham, Johnston, Chatham and Orange. Shay has over 12 years of experience and can assist you with FHA, VA, USDA, NCHFA and conventional loans. Shay can be contacted at 919-624-8614 shay@shaycampbellmortgage.com or visit his website shaycampbellmortgage.com
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