source:
  type: guide
  id: usda-hb-3555-16.5
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.5 —
    Annual Fee
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.5
    — Annual Fee.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-16.5-full
  canonical_id: usda-hb-3555-16.5-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.5 — Annual
    Fee
  type: do
  tags:
  - regulator-direct
  - usda
  - usda-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.5
      — Annual Fee
    source_class: usda-handbook
    source_url: https://www.rd.usda.gov/sites/default/files/hb-1-3555_consolidated.pdf
    snapshot_id: 0466acd1ea2d17a4
    fetched_at: '2026-05-25T14:10:13Z'
    content_hash: sha256:22ac6f998ff72578e318fca138ebe80fb18ae2fc701eb5936172f1842679a13a
    paragraph_quote: '16.5 ANNUAL FEE The servicer will electronically pay the Agency
      the annual fee on all purchase and refinance transactions, which may be passed
      on to the borrower. The servicer responsible for payment is required to enter
      into a User Agreement to electronically receive billing notifications and submit
      payments. The annual guarantee fee amount published in Exhibit K of RD Instruction
      440.1, available in any Rural Development office or by selecting “Part 1800:
      General” on the Rural Development Instructions website located at https://www.rd.usda.gov/resources/directives/instructions.
      The fee is subject to change to maintain a subsidy neutral program required
      by Public Law 111-212. Information for gaining access to the Agency’s Guaranteed
      Annual Fee (GAF) system can be found at https://www.rd.usda.gov/resources/usda-linc-training-resource-
      library. A. Amount of Annual Fee The servicer will pay an annual fee to the
      Agency which is calculated on the average scheduled unpaid principal balance
      of the mortgage. B. Calculation of Annual Fee The amount of the annual fee is
      calculated from the original amortization schedule of the mortgage at loan closing.
      The annual fee does not include delinquent payments, prepayments, agreements
      to postpone payments, or loan modifications to the original mortgage. C. Due
      Date of Annual Fee The annual fee is due and payable to the Agency on the 1st
      day of the billing month with a grace period for payments credited through the
      15th day of the billing month. Electronic payments submitted on a business day
      prior to 7:00 p.m. Central Time will be credited the next business day. Electronic
      payments after 7:00 p.m. Central Time, or on a non-business day, will credit
      two business days later. HB 1-3555 (03-09-16) SPECIAL PN 16-9 Revised (08-05-25)
      PN 649 Guidance documents lack the force and effect of law, unless expressly
      authorized by statute or incorporated into a contract. USDA may not cite, use,
      or rely on any guidance that is not available through their guidance portal,
      except to establish historical facts. D. Payment of Annual Fee The servicer
      is responsible for the payment of the annual fee to the Agency. E. Advance Notice,
      Billing, and Reconciliation of the Annual Fee Servicers will receive advance
      notice, two months prior to the current annual fee due date, documenting the
      annual fee amount due in the subsequent year to allow the servicer to adjust
      a borrower’s escrow collection to accommodate the next scheduled billing period.
      Advance notices are generated on the first business day of the month. The annual
      fee billing file will be available to the servicer on the anniversary closing
      month of the loan each year. Payment of any annual fee billed is due to the
      Agency on the 1st day of the month following the anniversary date of loan settlement.
      The billing file will outline the current annual fee amount due, all past due
      annual fee amounts, and all late charge amounts due for each individual loan
      in the servicer’s portfolio that are subject to an annual fee. F. Late Charge
      on Unpaid Annual Fee Payments received by the Agency after the payment dates
      prescribed in this section and supported by §3555.107(h) of 7 CFR 3555 shall
      include a late charge of four percent of the unpaid fee amount. In addition
      to the initial late charge provided, the lender may be assessed an additional
      late charge on any annual fee remaining unpaid after the last day of the month
      in which payment was due. This additional late charge will be one percent of
      the unpaid annual fee amount. Annual fee late charges cannot be passed on to
      the borrower. G. Period Covered by Annual Fee The initial annual fee shall cover
      the period effective with the first day of the calendar month following the
      settlement date and ending on the last day of the settlement anniversary month.
      Subsequent annual fee payments shall cover the twelve-month period preceding
      each subsequent anniversary date. HB 1-3555 (03-09-16) SPECIAL PN 16-10 Revised
      (08-05-25) PN 649 Guidance documents lack the force and effect of law, unless
      expressly authorized by statute or incorporated into a contract. USDA may not
      cite, use, or rely on any guidance that is not available through their guidance
      portal, except to establish historical facts. H. Duration of Annual Fee The
      servicer shall pay the annual fee to the Agency until termination of the Loan
      Note Guarantee. Termination may be any of the following: x When the mortgage
      reaches maturity; x At prepayment. The borrower paid the mortgage in full prior
      to the maturity date or by an approved short payoff; x Foreclosure. The property
      was acquired by a lender or third party at a foreclosure sale; or x Voluntary
      conveyance. The property was conveyed to the lender through an approved deed-in-lieu
      of foreclosure agreement. A termination event must be reported to the Agency
      within 15 days of occurrence. I. Pro Rata Payment of the Annual Fee If the Loan
      Note Guarantee is terminated prior to the due date of the annual fee due, the
      servicer shall pay a prorated portion of the fee. The annual fee is prorated
      monthly beginning with the month proceeding the settlement date. The servicer
      must determine how many months of the scheduled annual fee period have elapsed
      at the time of termination. Regardless of what day of the month the loan is
      terminated, the entire month in which termination occurs will be included in
      the prorated calculation. If the Loan Note Guarantee is terminated after the
      due date of the annual fee payment, the servicer shall pay a prorated portion
      of the annual fee. The calculation will be prorated from the due date of the
      last annual fee to the date of termination. A pro rata annual fee will also
      be due and payable after a foreclosure is complete. The lender shall pay a portion
      of the annual fee prorated from the due date of the last annual fee to the date
      of settlement. HB 1-3555 (03-09-16) SPECIAL PN 16-11 Revised (08-05-25) PN 649
      Guidance documents lack the force and effect of law, unless expressly authorized
      by statute or incorporated into a contract. USDA may not cite, use, or rely
      on any guidance that is not available through their guidance portal, except
      to establish historical facts. J. Method of Payment of the Annual Fee Payment
      of the annual fee will be remitted electronically. Implementation and technical
      guides to explain electronic payment of the annual fee may be found on the USDA
      LINC website, located at https://usdalinc.sc.egov.usda.gov/RHShome.do. K. Nonpayment
      of the Annual Fee If for any reason the servicer fails to pay the scheduled
      annual fee payment, submitted loss claims may be reduced by the cumulative amount
      of unpaid annual fees, late fees, and/or additional late charges due to the
      Agency. Servicers are subject to termination of their eligibility to participate
      in the SFHGLP due to nonpayment of the annual fee in accordance with §3555.52(c)(1)
      of 7 CFR 3555 and Chapter 3 of this Handbook.'
  judgment: false
