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Changes Coming to USDA Loan Program

November 15, 2016

Friends, this information applies to areas that the USDA Single Family Housing Guaranteed Loan program covers. For a map of eligible areas, visit:

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do;jsessionid=qNmp-oaYSPcYmEAYz8cOwxOn

The US Department of Agriculture is making some changes to its Single Family Housing Guaranteed Loan Program (also known as a USDA loan) effective October 16, 2016.  A USDA mortgage allows for a minimal cost of entry in order to make homeownership affordable and attractive in rural areas. However, many areas just outside of urban areas can qualify for a USDA loan. There are caps on the total value of the home as well as household income limits.
 

The USDA loan provides a loan up to 100% of the home value with an upfront loan guarantee fee and an annual guarantee fee (which is paid monthly). However, there is a fee for the convenience of a zero-down loan:

Up Front Lending Fee – this is dropping from 2.75% to 1.0%. On a $300,000 loan, this would now add $3,000 to the loan amount (down from $8,250).

Annual Fee – The annual fee, paid monthly, will be .35% of the average scheduled unpaid principal balance, down from .5% this last year. For an unpaid average balance of $250,000, the amount saved per month will be a bit more than $30 under the new parameters.
 

There are a lot of financial benefits to a USDA loan and those benefits are getting better.
If you would like to learn more, please contact me at (206) 730-0962 or email nina.bjornstal@sothebysrealty.com. I can put you in touch with a lender who can discuss all the ins and outs of this program with you and help you determine if this program meets your needs.
 

Source:

 http://www.realtor.org/articles/usda-reduces-fy-2017-guaranteed-loan-fees

http://eligibility.sc.egov.usda.gov/eligibility/EligibilityUserGuide.pdf

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