USDA Rural Development Mortgage Guarantee Fees for 2012

USDA offers zero down financing in designated rural areas to households under certain incomes. In rural King County neighborhoods, like Carnation or Duvall, the income limit for a 1-4 family household is $92,600.

Similar to an FHA or VA insured mortgage, USDA has an upfront "funding fee" which is technically called a "guarantee fee".  Typically this cost is added to the loan amount and financed.  For 2012, the upfront USDA guarantee fee for purchases is 2% and effective December 7, 2011 and through 2012, refinances are 1.5% of the loan amount. 

USDA has supplemented this with an annual fee which is paid monthly (like FHA). The annual fee is charged with both purchase and refinance transactions at a rate of 0.3%. For example, if you have a loan amount of $300,000, the monthly cost would be $75 (300,000 x 0.3% divided by 12 months). 

If you're interested in a zero down USDA loan for a home located anywhere in rural Washington, I'm happy to help!

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