USDA Rural Housing announced today 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 (FY) 2016. FY 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 (monthly PMI) of .50% will remain unchanged. The upfront guarantee fee is a one-time fee that is charged by all government mortgage programs ( USDA, FHA, VA) and commonly rolled into the borrowers total loan amount.
Update 5/1/2016 – please see important news about USDA Guarantee Fee Reduction here set to begin October 2016
Current guarantee fee on a $150,000 loan = $3,000.00. Total adjusted loan amount with guarantee fee = $153,000
New guarantee fee on a $150,000 loan starting 10/1/2015 = $4,125.00. Total adjusted loan amount with new guarantee fee = $154,125
Increase of $1,125 in this example.
Guaranteed loans obligated on October 1, 2015, through September 30, 2016 will be subject to the following fee schedule:
Purchase and USDA Refinance Transactions:
Upfront guarantee fee: 2.75 percent
Annual fee: 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 will want to insure their loan package has been submitted to USDA a few weeks before the deadline to stay at the 2% fee structure.
Please note this does apply to all USDA Purchase and USDA Refinance transactions.
Florida home buyers should act now before the increase. USDA is still Florida’s only 100% home loan and a great choice for first time buyers. If you have questions, please submit the short Info Request Form on the right side of this page to speak to a loan specialist. Mobile users can find the Info Request Form here. You can also contact us at 7 days a week at ph: 800-743-7556
Please note: home buyers that have questions regarding an existing USDA loan already in process with another lender/bank will need to speak to them directly for status and timelines.
USDA Guarantee Fee Increase October 2015