On Wednesday, October 1, 2014, the annual fee for both purchase and refinance loans will increase from .4 percent to .5 percent. The Guaranteed Underwriting System (GUS) has been updated to allow lenders to select and underwrite at either the .4 percent or .5 percent annual fee structure. Lenders should communicate with Rural Development (RD) offices to understand current processing time-frames.
GUS “Final Submissions” with an annual fee of .4 percent, that areissued a conditional commitment by RD prior to the close of business on Tuesday, September 30, 2014, will not be affected by the annual fee change. Those submissions that are not issued a conditional commitment by RD prior to the close of business on Tuesday, September 30, will be affected by the annual fee change.
Lenders must underwrite the loan using an annual fee of .5 percent and resubmit the application to RD in GUS.
Kentucky USDA Rural Home Loans : 100% Financing
The program’s full name is the Kentucky USDA Rural Development Guaranteed Housing Loan program. Most people call them “USDA loans” or “Rural Housing Loans.” Kentucky USDA loans are insured by the U.S. Department of Agriculture and the program’s most popular feature is its option for “no money down” financing. Via the USDA, you can finance 100% of a home’s purchase price.
It is a common misconception that these loans are only for farm types of properties. In fact, income producing farms are not eligible for the program. 118 of Kentucky’s 120 counties contain areas that are eligible for program (The whole area of Jefferson & Fayette Counties currently are ineligible). Parts of Bullitt County, McCracken, Christian, Boone, Kenton, Campbell Counties are ineligible.
The property cannot be located within the city limits of a municipality with a population level determined by the U.S Census with a limit set by the USDA.
A Kentucky USDA loans are similar to other loan types including loans via Fannie Mae and Freddie Mac. Kentucky USDA loans differ in their down payment requirements (none required) and its simpler loan approval standards. Kentucky Rural loans can be used by first-time buyers and repeat home buyers alike. Homeowner counseling is not required to use the Kentucky USDA program. Mortgage insurance premiums are also often more attractive than many alternative financing types.
Since October 1, 2012, USDA mortgage insurance rates have been :
•For purchases, 2.00% of loan amount upfront fee paid at closing
•For refinances, 2.00% of loan amount upfront fee paid at closing
•For all loans, 0.40% annual fee, based on the remaining principal balance
As a real-life example, then, a homebuyer with a $100,000 loan size in Kentucky would be asked make a $2,000 upfront mortgage insurance premium payment at closing, plus $33.33 in mortgage insurance monthly.
The upfront mortgage insurance is not required to be paid as cash and the amount is often added to your loan balance even above the purchase price and appraised value of the home. USDA is one of the only loan types that allows you to also finance in other closing costs and prepaid items above the purchase price up the appraised value if it is greater than the purchase price of the home.
Also similar to the FHA, the USDA requires mortgage insurance premiums to be paid until the loan is paid-in-full, or until the home is sold. USDA mortgage insurance rates are lower than those for a comparable FHA mortgages.assess a 1.75% upfront mortgage insurance premium and charge as much as 1.55% in MIP annually.
Senior Loan Officer
American Mortgage Solutions, Inc.800 Stone Creek Pkwy, Ste 7,Louisville, KY 40223Company ID #1364 | MB73346
Originally posted on Mortgage News:
For home buyers today, there are two mortgage programs which offer 100% financing. The first is the VA loan from the Department of Veterans Affairs. It’s available to most active military personnel and veterans nationwide.
The other program is the U.S. Department of Agriculture’s Rural Development Single Family Housing Loan Guarantee Program.
Sometimes called a “Rural Housing Loan” or a “Section 502″ loan, today’s USDA financing isn’t just for farms. Because of the way the USDA defines “rural”, there are plenty of exurban and suburban neighborhoods nationwide in which USDA loans can be used.
Home buyers who buy a home in a qualified USDA area, and who meet USDA income eligibility requirements, can take advantage of the USDA’s low interest rate, no downpayment mortgage program..
USDA mortgages are structured just like conventional ones via Fannie Mae and Freddie Mac. Where they…
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RHS Guarantee Fee Change
Beginning October 1st, RHS Guarantee fees will be changing as indicated in the following table:
Up-Front Guarantee Fee FY 2012 Through 9/30/2012 FY 2013 Effective 10/01/ 2012
Purchase Transactions (no change)
2% Refinance Transactions 1.5% 2%
Annual Fee FY 2012 Through 9/30/2012 FY 2013 Effective 10/01/2012
.40% Refinance Transactions .30% .40%
This is effective for all RHS loans which receive conditional commitments on or after October 1st, 2012 regardless of when the loan was submitted.