As we reported last spring, the USDA Rural Housing program will be significantly improving its terms starting in October of 2016. Here is an excerpt of the announcement from the USDA:
Upfront Guarantee Fee and Annual Fee Reduction for Fiscal Year (FY) 2017
This message provides advance notice of the 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 change from 2.75% to 1.0% of the loan amount. The annual fee will change from 0.50% to 0.35% of the average scheduled unpaid principal balance for the life of the loan.
Please refer to the unnumbered letter (UL), “Upfront Guarantee Fee and Annual Fee for Fiscal Year 2017,” for additional details.
In short, the fee to get started on a USDA loan will be cut by more than 60% and the only ongoing monthly USDA fees will be cut but 30%. All of that makes the USDA Rural Housing program even more useful. The USDA Rural Housing program is great for folks willing to buy a home away from urban areas and who don’t make more than about $80-90k per year as a household. The rates are low on USDA loans and USDA home purchase loans require $0 down. For a map of eligible areas see here.
Contact us today for more info on the USDA Rural Housing mortgage program.