What is the current annual fee percentage for USDA loans?

The current annual fee percentage for USDA loans is 0.350%. This fee, often referred to as the annual premium, is charged on a yearly basis and is calculated based on the remaining principal balance of the loan. The annual fee helps support the USDA program, which provides support to rural housing initiatives and subsidizes interest rates for eligible borrowers.

Understanding the annual fee is crucial for potential borrowers, as it impacts their overall loan costs. A lower annual fee means more affordable payments over the life of the loan, making USDA loans an attractive financing option for low- to moderate-income buyers in eligible rural areas. The specific percentage is important for budgeting purposes and determining the total cost of home ownership with a USDA loan.

Contextually, the other options reflect annual fees that are no longer accurate under the current USDA loan guidelines. The changes in fee structures can occur over time, so it is vital for borrowers to stay updated with the latest USDA requirements.