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USDA rural development PMI mortgage insurance

USDA Refinance Funds Gone for 2012 – Purchase Money Still OK!

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USDA Refinance funds for fiscal year (FY) 2012 are now exhausted!

St Paul, MN: Have a USDA Rural Development loan?  Thinking of getting a USDA Refinance loan? Sorry – USDA announced today that they are out of money for refinances for 2012.

For the vast majority of homeowners, this really isn’t a big issue, as many of them can lower their interest rate and refinance into many other loan products.

Looking to buy a home? USDA Rural Development Purchase Loans on the other hand have plenty of money – so there is no need to worry if you are buying a home.

As a side note, the cost of a USDA home loan in going up slightly on October 1st, 2012. Currently the loans have mortgage insurance of .030%, and will be going up to .040%.  On a $100,000 loan, the old mortgage insure would have been $25 a month, and would now be $33.33 a month.

An original article by Joe Metzler (C) 2012 Metzler Enterprises, LLC for www.MnRealEstateDaily.com

USDA Rural Development loans to have PMI

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USDA loans in MN and WIIt is hard to move the economy, and especially the housing market forward when they keep making it more difficult and expensive to buy a home..

The USDA Rural Housing Loan will implement a new Annual (monthly) Fee of 0.30% charged on all loans with a Conditional Commitment issued on or after October 1, 2011. This fee will be added to the borrower’s monthly payment and will remain for the life of the loan.

One of the (now former) great benefits of the Rural Development Loan was the lack of mortgage insurance.

The initial Annual Fee, for the first year of the loan, will be calculated based upon the guaranteed loan amount (initial loan). For the remaining years of the loan, the Annual Fee will be calculated on the average annual scheduled unpaid principal balance of the loan, not the actual unpaid principal balance.

The good news is the Upfront Guarantee Fee will be reduced from 3.5% to 2% for purchase transactions. This fee can be financed into the loan amount with an LTV up to 102% or paid in cash.

The Upfront Guarantee Fee for refinance transactions will remain at 1%.