USDA to Cut Mortgage Fees

The U.S. Department of Agriculture (USDA) will reduce its upfront guarantee fee and its annual fee for lenders participating in its single-family housing guaranteed loan program, beginning Oct. 1, 2016. The upfront guarantee will decrease from 2.75 percent to one percent of the loan amount at closing. The annual fee will decrease from 0.45 percent to 0.35 percent. Because borrower delinquency and foreclosure rates are at historically low levels, USDA can make these cuts to reduce borrowers’ costs. USDA loans are a very small part of the overall mortgage volume but for rural homebuyers, these cuts could be significant.

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