USDA Rural Housing 2023 fee chart is listed below. Please note the guarantee fee and annual fee apply to both USDA purchase and refinance transactions. The new 2016 USDA guaranteed fee structure will stay in place through September 30, 2023, all USDA borrowers are required to pay this.
The new upfront USDA Guarantee fee is 1.0% for all purchase and refi transactions. The annual fee (or monthly PMI) of .35% will remain the same, unchanged until Oct 2023. The upfront guarantee fee is a one-time fee that is charged by all the popular government mortgage programs. This fee can be called a Guarantee fee, Funding fee, or Mortgage insurance premium (MIP) depending on the program. The one-time costs are commonly added to the borrower’s total loan amount. The good news is USDA loans have the lowest upfront fees, nearly 50% less when compared to FHA loans
Example for calculating the upfront USDA guarantee fee:
Home buyer purchases a home for $175,000 – the buyer uses 100% financing USDA loan ( no money down)
The USDA guarantee fee added to the loan is 1.0% or $1,750
The total loan amount is $176,750
Example for calculating the upfront USDA annual fee – even though it’s called “annual fee” this is actually a monthly mortgage insurance (PMI) cost:
A home buyer purchases a home for $175,000 – 100% financing.
175,000 x.035 = $612.50 / 12 = $51.04 per month in mortgage insurance costs. This will be added to the borrower’s monthly mortgage payment, just like taxes and home insurance.
Buyers can use the USDA Loan Payment Calculator here to help calculate monthly expenses. All the latest USDA loan eligibility guide lines can be found here.
Home buyers that have questions are encouraged to contact us by calling 800-743-7556 or just submit the Quick Contact form on this page.
Leave a Reply