How do I add the USDA Guarantee and Annual Fees?
USDA mortgage insurance is available for Fannie Mae 3200, Freddie Mac 3200, or inhouse, monthly, installment, fixed rate transactions with 360 payments and Single Family Dwelling, 2-4 Family Dwelling, Condo or PUD collateral.
On the Calculations page under the Mortgage Insurance section you can indicate if USDA Mortgage Insurance Applies. Selecting this will support the calculations necessary to accommodate the USDA Rural Housing guarantee program.
The USDA Guarantee Fee is an upfront fee paid to the USDA to participate in Rural Housing Program.
The USDA Annual Fee is paid to the USDA one year after the funding date and every year thereafter for the life of the loan. This fee is an escrowed item because it is collected with each monthly payment and cannot be paid early. This fee affects the APR.
On an assumption transaction, you must enter the Guarantee Rate and the Annual Rate of the original transaction as the program will not be able to calculate them. Also, the Number of Months and Current USDA Payment fields must be completed with the information relevant to the original transaction.
When doing a USDA loan there may be a scenario where, due to the point in time when the loan was assumed, the system must create a balloon final payment to pay off the loan on the original maturity date. In this instance, a Validation Message may appear on the Print screen as follows:
As a repayment method of Amortized Balloon/Balloon is not allowed for a USDA loan, users will need to review the details of the transaction with the help of their own legal counsel, make any necessary changes, and then if necessary override (override is a user right/permission) the validation warning by using the following checkbox located below the validation warning on the Print screen:
