August 23, 2016
USDA's Upfront and Annual Fees are Getting Smaller...
This
important advisory notice explains how these changes affect your GUS
submissions.
On
October 1, 2016, the first day of Fiscal Year 2017 (FY17), both the upfront
guarantee fee and annual fee (collectively the “fee schedule”) for purchase and
refinance loans will decrease. We are
reducing the upfront guarantee fee from 2.75% to 1%, and the annual fee from
.5% to .35%. The Guaranteed Underwriting System (GUS) will be updated on August 31,
2016, to allow lenders to select and underwrite using either the FY16 or FY17
fee schedule. The determination will
be based on the current processing timeframes in each state.
Three
important facts to recall with respect to fee schedules:
-
Prior
to submitting an application, lenders should communicate with RD State Offices
to determine which fee schedule should be utilized for GUS submissions through
September 30, 2016. Some
RD State Offices are currently working through a backlog of FY16 guaranteed
applications, and lenders in those states will need to begin processing loans
using the FY17 fee schedule when it is determined that RD will be unable to
issue a conditional commitment prior to the close of business on September 30,
2016.
- The conditional commitment date of
issuance (not the loan closing date) determines the fee schedule for loan requests. Conditional commitments will not be issued
for loans submitted under the FY17 fee schedule until October 1, 2016.
- A
loan can only be closed under the FY17 fee schedule if the conditional
commitment was received under the FY17 fee schedule prior to closing. Lenders are not permitted to close loans under the FY17 fee schedule for
requests issued a conditional commitment under the FY16 fee schedule. If an adjustment is required, the lender,
will need to request the RD office release GUS for fee correction and
resubmission as discussed under “Resubmission” below.
Resubmission
On
October 1, 2016, GUS applications in a “Final Submission” status under the FY16
fee schedule that were not issued a conditional commitment by RD prior to the
close of business on September 30, 2016, will be released back to the lender in
GUS. Lenders must open the application
in GUS and update the “Upfront Guarantee Fee / Annual Fee Option” data field,
on the “Loan Terms” application page, by selecting the “FY17: 1% GuarFee + .35%
AnnFee” option from the dropdown box.
Once
all GUS data has been updated the lender must perform a “Final Submission” to
RD. An updated Form RD 3555-21, “Request
for Single Family Housing Loan Guarantee,” will not be required unless adverse
changes unrelated to the fee schedule have occurred. If required, the updated form must be
executed by both the applicant(s) and the lender, and it can be executed at
closing or settlement. Additional
documentation may be required when the original underwriting recommendation is
changed and/or the underwriting recommendation is “REFER” or “REFER WITH
CAUTION.” Please refer to the GUS
Underwriting Findings Report for guidance.
As
our fiscal year end draws nearer, we thank you again for your participation in
the USDA Single Family Housing Guaranteed Program, and we look forward to
serving you in FY17. If you have any
questions regarding the topics discussed above, please contact Josh Rice at Joshua.Rice@wdc.usda.gov.
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