USDA financing is changing!
USDA has given advanced notification of the change in the upfront and annual fees structure which will be effective for Single Family Housing Guaranteed Loan Program loans in the fiscal year of 2016. A loan is “obligated” when USDA has approved a completed loan application package and issues form RD 3555-18 – Conditional Commitment for Single Family Housing Loan Guarantee.
Guaranteed purchase and refinance loans obligated on October 1, 2015 through September 30, 2016 will be subject to the following fee schedule:
Upfront Guarantee Fee = 2.75%
Annual Fee = 0.50%
In order to comply with this upcoming change, loans submitted on or after September 1, 2015 will be underwritten with the new Upfront Guarantee Fee of 2.75 percent. If the loan file is submitted to USDA and the Conditional Commitment is issued prior to October 1, 2015, then the upfront fee will stay at the current factor of 2.0 percent.
If the Conditional Commitment is received with the current factor of 2.0 percent, but the disclosures reflect 2.75 percent, you will need to issue a Change in Circumstance for the reduced upfront fee. EA will then re-disclose on the file. The three-day MDIA waiting period does not apply in this instance as the APR is being reduced.
The Unnumbered Letter – Upfront Guarantee Fee and Annual Fee Schedule Effective October 1, 2015 – is available under “June 2015” on the USDA website.