USDA has announced some fantastic news for their loans. On all loans that USDA issues commitments on or after October 1st, 2016 they are lowering their fees. USDA commitments are when USDA officially issues an approval. When doing a USDA loan your mortgage lender issues an approval and then it goes to USDA for them to issue their approval. Here is a break down of the new fees:
Upfront Guarantee Fee- This fee is currently 2.75% of the loan amount and on October 1st, 2016 will be 1%. This fee is rolled into your loan amount and this is a huge savings.
Annual Fee- This fee is similar to monthly mortgage insurance and is in the monthly payment. This is going from .5% to .35%.
Do not forget USDA loans offer 0% down payment when buying a rural property. And the buyer(s) must meet income requirements. To find out if a home qualifies for a USDA loan go to: USDA Property Lookup.