Beginning October 1, 2012, USDA will be increasing their guarantee fee and annual fee. USDA’s guarantee fee is much like a VA funding fee or FHA upfront mortgage insurance premium: it is a lump sum that is most often financed into the loan. The annual fee, like FHA, is paid monthly as part of the mortgage payment.
The guarantee fee for purchases will remain at 2% of the loan amount. For refinances, the guarantee fee will increase from 1.5% to 2%.
The annual fee for both refinances and purchases will increase from 0.3% of the base loan amount to 0.4% effective October 1, 2012.
USDA mortgages offer zero down financing for borrowers who meet income limits and properties in designated rural areas.
NOTE: The photo in this post reflects eligible rural areas for 100% financing using a USDA zero down mortgage. If the property is not located in an orange (or peach?) shaded area, it may be eligible to purchase with a zero down mortgage.