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Thursday, 03 November 2016 14:19

2016 USDA / Rural Development Changes!

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HUGE Announcement!!!!

The USDA made some major improvements to the Single Family Housing Guaranteed Loan Program also know as a Rural Development loan.  The upfront guarantee fee changed from 2.75% to 1% of the loan amount and the annual fee changed from .5% to .35% of the average scheduled unpaid principal balance for the life of the loan.  What's that mean???? 

Here is a 150,000 example:

  Old Program New Program
Upfront Fee $ 4,241.63 $ 1,515
Monthly Fee $63.75 $43.84

Now the really cool thing is the RD loan program is once again in many cases much more attractive to home buyers than an FHA loan.  Lets run a quick comparison.

FHA VS RD  $150,000 price, assuming 4% interest rate, $200 for property taxes, & $80 for insurance

  FHA Rural Development
Principle & Interest $703.15 $723.36
Insurance $80 $80
Taxes $200 $200
Mortgage Ins. (PMI) $101.71 $43.84
Total payment: $1,084.86 $1,047.20
     
Down Payment Required $5,250 $0
 So RD saves $38 per month and is zero down!

For more information feel free to reach out to me or download this flyer!