Just A Reminder: USDA Will Change Fees Effective 10/1/11

There are two very important changes that are scheduled to take effect with loans obligated on or after October 1, 2011. The changes are: (1) A monthly mortgage insurance fee of 0.3 percent will be charged on all loans obligated on or after this date (2) The up-front guarantee fee for purchase loans transaction will decrease from 3.5 percent to 2 percent of the loan amount. Please note these changes are effective October 1, 2011. Currently the up front “guarantee” fee is 3.5% of the loan amount.  For example, on a $150,000 loan, the fee is $5,250 which is normally added to the final loan amount.  The new fee will be lowered to 2%, or $3000 in the above example. USDA will also begin to charge an annual fee  of 3% of the outstanding loan balance.  On a...

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