Great news today from USDA Rural Housing in regards to the one-time upfront guarantee fee, and the annual (monthly PMI) fee. These USDA loan fees are going to reduced across the board starting 10/1/2016. This reduction will apply to both purchase and USDA refinance transactions and will stay in place until September 2017.
POST UPDATE: Please find the new 2023 Guarantee Fee Updates Here.
USDA Guarantee Fee Reduction October 2016: Example of saving for a buyer purchasing a $175,000 home.
Guarantee Fee Savings ( amount of overall closing costs reduction) = $3,062.00
Monthly Mortgage Payment Savings = $37.00 per month.
The USDA upfront guarantee fee and annual fee structure that will be effective for Single Family Housing Guaranteed Loan Program (SFHGLP) loans in fiscal year (FY) 2017, which begins October 1, 2016 and ends at the close of business on September 30, 2017. The upfront guarantee fee will be reduced from 2.75% to 1.0% of the loan amount. The annual fee will be reduced from 0.50% to 0.35% of the average scheduled unpaid principal balance for the life of the loan.
This USDA fee reduction is great news for first time home buyers that often have little money to put down on a home. The USDA mortgage is still 100% financing with secure 30 year fix rate terms.
Questions about USDA 502 Guarantee Loans? Please contact USDA Mortgage Source at ph: 800-743-7556 or visit www.UsdaMortgageSource.com We serve buyers across the nation 7 days a week.
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Jen says
If I start the loan process now, and close the first week in October, will I still receive the reduced fees?
USDA Mortgage Source says
Great question. You can start the loan process now with the lender. However, before you close the lender must send your loan file package to USDA for the final review. This process can take about 2-7 days depending on the state. As long as USDA does NOT receive your file before Oct 1st, you will be on the lower fee schedule.
Janice Pelfrey says
What about people who currently have USDA loans will they receive any kind reduction?
USDA Mortgage Source says
Only if they refinance their current loan. Thnak you
Vanessa says
I purchased my home in September 2013. Other than saving money each month, is there a benefit to refinancing? If I stay in my current mortgage will my USDA fee end in 10 years or is the fee the life of my loan?
USDA Mortgage Source says
The benefits of refinancing (if any) will depend on many variables.. most importantly your current interest rate and whether you currently pay monthly mortgage insurance. Contact us and a specialist can review to with real quick to check.