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Overview – as set in notice (AN 4551) announced that the Single Family Housing Guaranteed Loan Program will implement changes to the USDA Guarantee Fee. The new annual fee (similar to FHA Annual MIP) will be charged and the current upfront fee will be decreased.

The changes are effective on October 1, 2011 for any loans receiving the USDA conditional commitment on or after this date. The reduced up-front fee will be still be calculated based on the guaranteed loan amount. The new annual fee will be paid over the life of the loan and is not removed at 78%. It is calculated based on the unpaid principal balance and will be collected monthly but paid to the Agency on an annual basis.

This change is driven by the date USDA issues the conditional commitment, and that date is contingent upon:

· Our ability to get the loan submitted to USDA for underwriting review

· USDA’s queue and turn time in issuing commitments

There will be no exceptions for the change in fees that will occur if the loan does not receive the conditional commitment before 10/01/11.

	Current Guarantee Fee	New Guarantee Fee
Up-front Fee	Purchase 3.5%	Purchase 2%
	Refinance 1%	Refinance 1%
Annual Fee	NA	0.3%

Please feel free to call me with any questions, the information above is verbatim per the USDA Release

Samuel Morales

Residential and Commercial Loan Officer

Office: (210) 257-0642

Mobile: (210) 286-7267

Fax: (210) 257-0510

www.yourloanofficer4life.com

www.streamlinefha.org

www.streamlinefha.net

www.newhousingbill.org

NMLS: 295626

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