Washington State USDA Home Loan guidelines are about to change…
In an attempt to remove the need for taxpayer support to fund the USDA Rural Development Program, the U.S. Government has proposed changes to the Washington State USDA Rural Development Home Loan Program that will impose a permanent monthly mortgage insurance premium on all USDA home loans.
Currently, home buyers qualifying for a Washington State USDA Home Loan pay a 3.5% USDA Upfront Guarantee Fee, but do not have to pay a monthly private mortgage premium (see below for a side-by-side comparison). It appears as though the United States Department of Agriculture is following in the shadows of their counterpart the Department of HUD (or FHA).
The most common question that Washington State Real Estate agents and builders are asking is,
“How will these changes affect our local housing market and the ability for a home buyer to qualify for the USDA Loan Program post October 1, 2011?”
This is a great concern as many real estate agents and builders rely on the Washington State USDA Home Loan to assist their clients in financing homes.
Below, I’ve put together a side-by-side comparison breaking down how the proposed changes will affect a borrower’s monthly payment. Based on the numbers below, a difference of $53.24/month is equivalent to a decrease in a borrower’s purchase power in the amount of $10,507. <—— That is profound…