Pursuant to Public Law 111-212, Section 102 (July 29, 2010), the Secretary of the United States Department of Agriculture (USDA) may collect from the lender under the Single Family Housing Guaranteed Loan Program (SFHGLP) an annual fee not to exceed 0.5% of the outstanding principal balance of the loan for the life of the loan. The intent of the annual fee is to make the SFHGLP subsidy neutral, thus preventing the need for taxpayer support of the Program.
According to Rural Development (RD) Administrative Notice (AN) No. 4551 (1980-D), effective October 1, 2011, the SFHGLP will be subject to an annual fee of 0.30% of the outstanding principal balance while the up-front guarantee fee for purchase transactions will decrease from 3.5% to 2%. The up-front guarantee fee for refinance loan transactions will remain at 1%.