USDA Rural Development Announces Upfront Guarantee Fee Increase for Single Family Housing Effective Oct. 1, 2015

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On Oct. 1, 2015 the upfront guarantee fee for purchase and refinance loans will increase from 2 percent to 2.75 percent.  The annual fee will remain at 0.50 percent for purchase and refinance loans. 

This change is necessary to maintain the program’s operational cost structure, which requires no congressional subsidy support to offset credit costs. 

To receive a Conditional Commitment prior to the Guaranteed Fee increase on Oct. 1, 2015, lenders must submit complete files by close of business on Sept. 24, 2015.

Borrowers and Lenders will be impacted by the fee change if a GUS "Final Submission", with an upfront guarantee fee of 2 percent is not issued a conditional commitment by RD prior to the close of business on Sept. 30, 2015.  If this occurs, lenders must re-underwrite the loan with an upfront guarantee fee of 2.75 percent and resubmit the application to RD in GUS.  Further complications might then arise, since GUS underwriting recommendations would be subject to change at the time of resubmission.   (See “Resubmission Details” below.)  As noted above, lenders can avoid this possibility by communicating with RD State Offices to determine which guarantee fee schedule should be used for GUS Submissions through Sept. 30, 2015.

Borrowers and Lenders will not be impacted by the fee change if a GUS "Final Submission" with an upfront guarantee fee of 2 percent is issued a conditional commitment by RD prior to the close of business on Sept. 30, 2015, unless the lender requests the file to be released back so that adverse changes may be made to the application.

Last Modified: 09/08/2015