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|
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
|Principle & Interest||$703.15||$723.36|
|Mortgage Ins. (PMI)||$101.71||$43.84|
|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!