The upfront USDA Guarantee Fee for all new Florida USDA 502 Guarantee purchase and refinance loans as of October 1 2014 – October 1 2015 will be as follows:
USDA Up front “Guarantee Fee” (this is the upfront fee the USDA charges to participate in the Rural Housing program and is usually financed ( rolled into) the borrower new loan)
Update May 2016: Please see new information about upcoming USDA Guaranteed fee reductions here. Please disregard the information below.
An example of how the upfront fee is calculated. For a sales price of $150,000, the upfront fee would be 2% or $3000, and typically that would be added to the loan amount to make the final loan amount $153,000.
USDA Annual Fee (this is the monthly fee paid with the mortgage payment – most know this term as how it referred to on Conventional loans – private mortgage insurance or “PMI”)
USDA Purchase & Refinance Transactions: new fee effective October 1st, 2014 .50% (up from .35%)
An example of how the annual fee is calculated. For a loan amount of $153,000, the new annual fee would be .50%, or $153,000 x .05 = $765.00 divided by 12 for a monthly figure of $63.75 per month. This amount would be included in the monthly mortgage payment like taxes and homeowners insurance.
The upfront and annual guarantee fee increase has allowed the USDA Rural Housing loan program to be a self sustaining. This allows the program to pay for itself and removes it from the annual Congressional budget process. In the past, the USDA guarantee loan program has run out of money as the fiscal year neared its end, and in many cases loan closings were delayed. This new fee structure has removed that problem which should help avoid the delays in funding.
Please see a new update in regards to USDA Rural Housing Guarantee Fee’s here.
USDA Mortgage Source is Florida’s leading USDA RD loan resource serving you 7 days week. Please be sure to contact us at ph: 800-743-7556 You can also submit the short info request form here for faster service.
USDA RD Guarantee & Annual Fee 2015