Under USDA provisions, when is the annual fee applied?

The annual fee under USDA provisions is applied each year following the loan's issuance. This fee is typically a percentage of the unpaid principal balance and is collected to help maintain the program's funding and support ongoing program costs. Unlike some other loan programs that might require an upfront fee or charge at different stages of the loan process (like at application or refinancing), the USDA annual fee is designed to be a recurring cost that borrowers can expect to pay on a yearly basis for the life of the loan. This structure ensures that as the borrower continues to utilize the benefits of the loan, they contribute to the sustainability of the program.