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Serious Savings for USDA Homebuyers Means Big Savings for your Clients

USDA fees are shrinking! This means BIG savings for your clients and more opportunities for home sales.

 

As a real estate professional, your goal is to help clients buy and sell homes. But sometimes, underwriting requirements stand in the way of completing a sale.

Fortunately, there are attainable alternatives to conventional financing. One option that is often overlooked is USDA home loans. Although this financing is designated for “rural” properties, the USDA rural footprint is larger than many people realize.* And with a new lower fee schedule, these mortgages are even more affordable than before!

Over the course of 10 years, your buyer would save a total of $6,500 in upfront and annual fees on a $200,000 mortgage.

Let’s review some of the key features of USDA single-family mortgages:

  • USDA rural home loans aren’t limited to farms and acreage.
  • Some eligible locations encompass an entire small town or include suburban areas.
  • 100% financing may be available for those without down payment funds.
  • Credit requirements are flexible.
  • NEW lower fees save money up front – and annually.
 

USDA-backed mortgages require a Guaranteed Upfront Fee and an Annual Fee. The Fiscal Year 2017 (FY17) fee schedule becomes effective on October 1, 2016 and expires on September 30, 2017.

  • The Upfront Guarantee Fee is now just 1.0%, down from last fiscal year’s 2.75% rate. In some cases, this “upfront” fee can actually be rolled into the mortgage, along with closing costs.
  • The Annual Fee dropped to 0.35% from the previous rate of 0.5%.

 

Sharing this money-saving opportunity with your prospects may help more families fulfill their dreams of homeownership.

Of course, a USDA rural home loan isn’t for everyone, so we’re happy to work with you to find just the right mortgage for each of your clients. Contact us today to learn more.




 

*Borrowers must qualify at a certain income level depending on the county where the property is located. The property must be in a designated rural area. Reduced USDA guarantee fees apply to loan applications that have been issued a Conditional Commitment for Single Family Housing Loan Guarantee on or after Oct. 1, 2016.


- By Lauren Howey, Sep 25, 2016



 
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