USDA has announced some positive changes coming in October 2016. USDA or Rural Housing is a great product offering 100% financing on properties in certain census tracts. There are income limits and the property cannot be lavish. All household income is counted even if there is only one occupant on the loan. So, you need to know the guidelines. It is a great product for someone with little down payment money.


EFFECTIVE IN OCTOBER 2016 THE UP FRONT FUNDING FEE WILL DROP TO 1%. Currently it is at 2.75%. The up front fee is added right onto the mortgage increasing the loan amount.


EFFECTIVE IN OCTOBER 2016 THE MONTHLY PMI WILL DROP TO .35%. Currently it is at .50%. There was a time when there was no monthly PMI (private mortgage insurance)  factor; those days are gone. Even at .50% it is considered low, but .35% will be even better!


So some positive and welcome changes coming for USDA in October. When someone buys in a USDA census tract, we always consider this program. Soon it will be even better!

Comment balloon 6 commentsDora Griffin • June 01 2016 02:34PM


Those are encouraging changes!  If only VA would follow suit and drop the funding fee.

Posted by Fred Griffin Tallahassee Real Estate, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) almost 4 years ago

Good morning Dora. Looking forward to the changes, it will help clients for sure. Hopefully FHA follows with lower costs as well.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) almost 4 years ago

Agreed, Joe. FHA dropping the monthly fee helped a bunch, but it would be nice to see it back at .50 range again. Thanks for your comment.

Posted by Dora Griffin, NMLS 6380 (D A Griffin Financial.LLC) almost 4 years ago

Fred, I know! I have a couple of VA's on my desk now. One is disabled so he won't have the fee. The other will, and it is steep. Overall, tho it is a great program given the zero down and no monthly MI.  Thanks!

Posted by Dora Griffin, NMLS 6380 (D A Griffin Financial.LLC) almost 4 years ago

If a person is scheduled to close October 1st with USDA will these changes apply?

Posted by Val Whittier over 3 years ago

If you have a loan ready to close you should check with the lender. Typically changes are effective with application dates, not closing dates.  I always like to err on the side of caution and consult with the lender. 


Thanks for the post.

Posted by Dora Griffin, NMLS 6380 (D A Griffin Financial.LLC) over 3 years ago