The U.S. Department of Agriculture’s Rural Housing Service (RHS) is increasing its upfront fee paid by borrowers on a no-downpayment loan from 2% to 2.75% effective Oct. 1. According to an RHS official, the difference in monthly payments is $4.83 for a typical $135,000 loan.

RHS is permitted to raise this fee up to 3.5% under federal statute, but RHS says it does not anticipate any additional increases in its guarantee fee at this time.

RHS is raising its upfront fee to 2.75% in order to keep the program self-funding and to avoid having to request appropriations from Congress.