USDA RD came out today with the new upfront guarantee fee and annual fee structure that will be effective for Single Family Housing Guaranteed Loan Program (SFHGLP) loans in fiscal year of 2016. Their new fiscal year for 2016 begins October 1, 2015 and the new upfront guarantee fee will change from 2 percent of the loan amount to 2.75 percent of the loan amount. The annual fee (or monthly PMI) of .50% will remain unchanged. The upfront guarantee fee is a one-time fee that is charged by all the popular government mortgage programs like USDA, FHA and VA. The one time fee is commonly rolled into the borrowers total loan amount.
Current guarantee fee on a $200,000 loan = $4,000.00. Total adjusted loan amount with guarantee fee = $204,000
New guarantee fee on a $200,000 loan starting 10/1/2015 = $5,500. Total adjusted loan amount with new guarantee fee = $205,500
Increase of $1,500 in this example - pretty big deal for most home buyers.
Guaranteed loans obligated on October 1, 2015, through September 30, 2016 will be subject to the following fee schedule - Please note this applies to both USDA Purchase and USDA Pilot Refinance Loans.
Purchase and USDA Refinance Transactions:
Upfront guarantee fee: 2.75 percent
Annual fee ( monthly fee like PMI) : 0.50 percent
A loan is obligated when USDA has approved a complete loan application package and issued Form RD 3555-18 “Conditional Commitment for Single Family Housing Loan Guarantee” to the USDA approved lender. Loan guarantee requests submitted by the lender to USDA prior to September 30, 2015, in which a Conditional Commitment has not been issued before close of business that day, will be subject to the new 2.75% FY 2016 fee structure. Lenders/Borrowers should insure their loan package has been submitted to Rural Housing at least 2 weeks before the deadline to stay at the 2% fee structure.
Please note: home buyers that have questions regarding an existing USDA loan currently in process with another lender/bank - please be sure contact them directly about status updates or timelines.
Florida home buyers that have questions about applying for USDA loan can contact us 7 days a week at ph: 904-302-6060 or just connect with us below.
Located in another state? Please learn more about National USDA Loans Here.