source:
  type: guide
  id: usda-hb-3555-16.4
  authority: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.4 —
    Upfront Loan Guarantee Fee
  description: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.4
    — Upfront Loan Guarantee Fee.
  coverage_tier: operative
obligations:
- id: usda-hb-3555-16.4-full
  canonical_id: usda-hb-3555-16.4-full
  section: USDA SFH Guaranteed Loan Program Technical Handbook HB-1-3555 ¶16.4 — Upfront
    Loan Guarantee 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 ¶16.4
      — Upfront Loan Guarantee 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: '16.4 UPFRONT LOAN GUARANTEE FEE Lenders will pay the Agency
      the upfront guarantee fee through the LLC system interface with Pay.gov. The
      fee may be passed onto the borrower and is an eligible loan purpose. If the
      Agency is unable to issue the Loan Note Guarantee, the fee may be returned to
      the lender. Once the Loan Note Guarantee is issued, the fee is not refundable.
      The upfront guarantee fee amount is 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 Instruction 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. A. Calculation of Upfront Loan Guarantee Fee The maximum
      loan amount for a guaranteed loan is 100% of the appraised value plus the upfront
      guarantee fee. Eligible closing costs may be included in the loan amount up
      to 100% of the appraised value. Additional guidance on eligible closing costs
      is available in Chapter 6 of this Handbook. An up-front fee calculator is available
      for use by lenders and employees at https://www.rd.usda.gov/resources/usda-linc-training-resource-library.
      Refer to Chapter 6 of this Handbook for assistance in determining the maximum
      loan amount allowed for refinance transactions. HB 1-3555 (03-09-16) SPECIAL
      PN 16-7 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. There are three
      options for payment of the upfront guarantee fee. The following examples assume
      a 1% upfront fee. 1. Pay the entire upfront guarantee fee at loan closing Borrowers
      are not required to finance the upfront guarantee fee and may elect to pay the
      entire fee at loan closing from personal funds, seller concessions, or eligible
      gift assistance at settlement. Example: $100,000 loan x 1% = $1,000.00 upfront
      guarantee fee paid at loan closing. 2. Finance part of the upfront guarantee
      fee The borrower may elect to finance a portion of the upfront guarantee fee.
      In these cases, the borrower will pay an upfront fee that corresponds to the
      total loan amount that includes a portion the upfront fee. The remaining amount
      of the upfront guarantee fee not financed, will be paid by the borrower from
      personal funds, seller concessions, or eligible gift assistance at settlement.
      Example: $500 of the 1% fee will be financed; therefore, the total loan amount
      will be $100,500 loan x 1% = $1,005.00 (guarantee fee) In this scenario, the
      applicant will borrow $100,500.00 which includes $500.00 of the upfront guarantee
      fee. The borrower will pay the remaining $505.00 of the guarantee fee from personal
      funds at settlement ($1,005.00 total fee minus the $500.00 financed = $505.00)
      3. Finance the entire upfront guarantee fee The appraised value may only be
      exceeded by the amount of the upfront guarantee fee financed. Therefore, the
      entire upfront guarantee fee may be financed into the total loan. Example: The
      appraised value of the subject property is $100,000. The purchase price of the
      property is $98,000. The borrower has elected to finance $2,000 in eligible
      loan closing costs that does not include the upfront guarantee fee. Begin with
      the base loan amount of $100,000 ($98,000 purchase price plus $2,000 eligible
      closing costs). Calculate the total loan amount including the entire upfront
      guarantee fee being financed as follows: $100,000 / .99 = $101,010.10 (total
      loan amount including the upfront guarantee fee) $101,010.10 x 1% = $1,010.10
      (upfront guarantee fee). HB 1-3555 (03-09-16) SPECIAL PN 16-8 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.'
  judgment: false
