2016 USDA / Rural Development Changes!
HUGE Announcement!!!!
The USDA made some major improvements to the Single Family Housing Guaranteed Loan Program also know as a Rural Development loan. The upfront guarantee fee changed from 2.75% to 1% of the loan amount and the annual fee changed from .5% to .35% of the average scheduled unpaid principal balance for the life of the loan. What’s that mean????
Here is a 150,000 example:
| Old Program | New Program | |
|---|---|---|
| Upfront Fee | $ 4,241.63 | $ 1,515 |
| Monthly Fee | $63.75 | $43.84 |
Now the really cool thing is the RD loan program is once again in many cases much more attractive to home buyers than an FHA loan. Lets run a quick comparison.
FHA VS RD $150,000 price, assuming 4% interest rate, $200 for property taxes, & $80 for insurance
| FHA | Rural Development | |
|---|---|---|
| Principle & Interest | $703.15 | $723.36 |
| Insurance | $80 | $80 |
| Taxes | $200 | $200 |
| Mortgage Ins. (PMI) | $101.71 | $43.84 |
| Total payment: | $1,084.86 | $1,047.20 |
| Down Payment Required | $5,250 | $0 |
| So RD saves $38 per month and is zero down! | ||
For more information feel free to reach out to me or download this flyer!
Latest Blog Post
Jumbo vs Conventional Loan
JUMBO LOAN VS. CONVENTIONAL: WHAT KALAMAZOO MOVE-UP BUYERS MUST KNOW
Are you shopping for a luxury executive home or a custom build in Texas Township, Portage, or Richland?
Yesterday, a move-up buyer walked into my office after touring a gorgeous five-bedroom home near Texas Corners. The listing sat well above their previous starter home price point, and they were trying to calculate their down payment strategy.
They asked me, “Jeremy, at what price point does our mortgage switch from a standard Conventional loan into a Jumbo loan? Do Jumbo loans require massive 20% cash down payments?”