USDA to reduce Guarantee and Annual Fees

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2014-09-03_usdaEffective October 1, 2016, the upfront guarantee fee and annual fee (paid monthly) will be reduced with USDA mortgages. This new fee structure will take place until September 30, 2017, the end of the fiscal year for USDA.

The upfront fee will drop from 2.75% to 1.00%. The upfront free is based on the loan amount and is typically financed into the new mortgage.

The annual fee, which is paid paid monthly similar to mortgage insurance, will drop from 0.50% to 0.35%.  The annual fee is also based on the loan amount and then divided by 12 to arrive at the monthly payment.

USDA mortgages are no down payment mortgages (100% financing) available in designated rural areas to eligible borrowers who meet income limits.

I’m pleased to offer USDA no down payment mortgages – click here if I can provide you with a mortgage rates quote for your home in Washington state.

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