It is hard to move the economy, and especially the housing market forward when they keep making it more difficult and expensive to buy a home..
The USDA Rural Housing Loan will implement a new Annual (monthly) Fee of 0.30% charged on all loans with a Conditional Commitment issued on or after October 1, 2011. This fee will be added to the borrower’s monthly payment and will remain for the life of the loan.
One of the (now former) great benefits of the Rural Development Loan was the lack of mortgage insurance.
The initial Annual Fee, for the first year of the loan, will be calculated based upon the guaranteed loan amount (initial loan). For the remaining years of the loan, the Annual Fee will be calculated on the average annual scheduled unpaid principal balance of the loan, not the actual unpaid principal balance.
The good news is the Upfront Guarantee Fee will be reduced from 3.5% to 2% for purchase transactions. This fee can be financed into the loan amount with an LTV up to 102% or paid in cash.
The Upfront Guarantee Fee for refinance transactions will remain at 1%.