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Kentucky USDA Rural Development Loans annual fee increase from .4% to .5% effective October 1, 2014
On October 1,2014 the annual fee for both purchase and refinance Kentucky Rural Development Housing loans will increase from .4% to .5%. This change is required to maintain a neutral cost of the program. The Guaranteed Underwriting System (GUS) has been updated to allow lenders to select and underwrite at either the .4% or .5% annual fee structure. See example below to see how the changes will affect your Kentucky USDA Mortgage Loan Approval.
For example, take a $100,000 sales price home. The old mortgage insurance would be $33.33. Now with the new change of .5%, the monthly mi fee would be $41.66.
Kentucky USDA Lenders should communicate with Rural Development (RD) State Offices to understand current processing timeframes and determine which annual fee structure should be utilized for GUS submissions through September 30, 2014. Many RD State Offices are currently working through a backlog of guaranteed applications and lenders will need to begin processing loans using the .5% annual fee when it is estimated that RD will be unable to issue a conditional commitment prior to the close of business on September 30, 2014.