USDA Fiscal Year 2018 New Loan Commitment Fee Structure
Effective for all USDA Guaranteed Loan receiving a USDA Loan Commitment starting October 1, 2017, the USDA upfront guarantee fee will remain 1.00% and the annual fee will be .35%, for both purchase and refinance transactions. The represents a substantial reduction from the fiscal 2016 year USDA upfront guarantee fee of 2.75% and the annual fee of .50%.
With the reduction of the USDA fees, homebuyers using the USDA Loan Program during the Federal Government’s 2018 fiscal year, which is from October 1, 2017 to September 30, 2018, will achieve significant cost savings. For example, assuming a $250,000 purchase, with an interest rate of 3.50%, a homebuyer will find that they will receive the following benefits based on the new USDA Loan Commitment Fee structure:
- Monthly payment savings of $53.86 (principal, interest, annual fee of $1,207.60 Vs. $1,261.46)
- Lifetime payment savings of $7,347 ($415,569 - $408,222)
- Assuming the same monthly mortgage payment approximately $10,000 in additional home purchase buying power
To learn more about the Virginia USDA Guaranteed Loan program call (540) 328-9889.