USDA Rural Development has announced that the upfront guarantee fee will increase from 2.00 percent to 2.75 percent. The annual fee will remain at 0.50 percent. USDA emailed an advance notice today on this topic entitled “Upfront Guarantee Fee and Annual Fee for Fiscal Year (FY) 2016”. The unnumbered letter “Upfront Guarantee Fee and Annual Fee Schedule Effective October 1, 2015” is available online under “June 2015” (see pages 14 and 15).
For Single Family Housing Guaranteed Loan Program loans (SFHGLP) obligated on or after October 1, 2015, both purchase and refinance transactions will be subject to:
- An upfront guarantee fee equal to 2.75 percent of the loan amount (increased from 2.00 percent).
- An annual fee of 0.50 percent of the unpaid principal balance.
The current ConformX data integrity error for the 2.00 percent guarantee fee will be modified to only trigger for USDA loans with an obligation date (Field 51597 “RD Obligation Date”) prior to October 1, 2015. A new data integrity error will be added to ensure a guarantee fee of 2.75 percent for USDA loans with obligation dates on or after October 1, 2015.
The USDA data integrity errors not based on obligation date will be expanded to allow the new value of 2.75 percent for the guarantee fee. Clients with the ConformX System Default “Enable RD Guarantee Fee Data Integrity Checks” (Field 51598) set to “No” will still not receive any data integrity messages related to the USDA/RD upfront guarantee fee.
These changes will take effect on July 1, 2015. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
June 25, 2015