USDA Rural Development has announced for fiscal year 2017 that the upfront guarantee fee will decrease from 2.75 percent to 1.00 percent and the annual fee will decrease from 0.50 percent to 0.35 percent. The announcement entitled “Single Family Housing Guaranteed Loan Program Upfront Guarantee Fee and Annual Fee for Fiscal Year 2017” is available online in the Unnumbered Letters section of the USDA site.
For Single Family Housing Guaranteed Loan Program loans (SFHGLP) obligated on or after October 1, 2016, both purchase and refinance transactions will be subject to:
- An upfront guarantee fee equal to 1.00 percent of the loan amount (decreased from 2.75 percent).
- An annual fee of 0.35 percent of the unpaid principal balance (decreased from 0.50 percent).
The current ConformX data integrity errors for the 2.75 percent guarantee fee and 0.50 annual fee will be modified to only trigger for USDA loans with an obligation date (Field 51597 “RD Obligation Date”) prior to October 1, 2016. New data integrity errors will be added to ensure a guarantee fee of 1.00 percent and annual fee of 0.35 percent for USDA loans with obligation dates on or after October 1, 2016.
The USDA data integrity errors not based on obligation date will be expanded to allow for the new values. Clients with the ConformX System Default “Enable RD Guarantee Fee Data Integrity Checks” (Field 51598) set to “No” will continue to not receive any data integrity messages related to the USDA/RD upfront guarantee fee.
These changes will take effect on June 17, 2016. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.