What happens to the USDA annual guarantee fee if a borrower makes a down payment of 10% or more?
Correct Answer
B) The annual fee is reduced to 0.15%
When a USDA borrower makes a down payment of 10% or more, the annual guarantee fee is reduced from the standard 0.35% to 0.15% of the outstanding loan balance. This provides an incentive for borrowers to make larger down payments while still maintaining the government guarantee.
Why This Is the Correct Answer
When a USDA borrower makes a down payment of 10% or more, the annual guarantee fee is reduced from the standard 0.35% to 0.15% of the outstanding loan balance. This provides an incentive for borrowers to make larger down payments while still maintaining the government guarantee.
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