Last year USDA Rural Housing reduced the upfront guarantee fee (also known as the funding fee) charged on USDA housing mortgages. In addition, they also lowered the monthly mortgage insurance or “annual fee” thus saving home buyers a pretty good amount!
Today USDA announced that the guarantee fee for 2023 will remain at the same 1% of the loan amount. The annual fee will also remain at .35% which is a pretty good amount lower than FHA’s standard 30-year premium of .55%.
Take note, if you are a buyer already pre-approved for an FHA loan, but also meet the USDA income and location restrictions, be sure to take a closer look at the USDA loan. The monthly savings is pretty significant, plus USDA still allows home buyers to finance 100% of the purchase price if they choose. Please see the USDA mortgage calculator on the right for the proper annual fee calculation.
The current USDA fees will be in place until the end of next fiscal year 9/30/2023.
USDA offers many advantages including:
- 100% financing, no down payment
- The seller can pay buyers closing costs and tax/insurance impounds
- More generous household income limits in 2023
- No loan amount limits! Applicants are qualified based on their debt to income
- Available to all eligible homebuyers nationwide
Read more about the latest USDA loan eligibility here and by viewing the helpful video below. Questions? Please contact us 7 days a week with questions.
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