In trying to calculate an APR for a USDA rural housing loan, we are finding that there is a sizable difference in the APRs (.135), but APRWin is NOT indicating it is a violation because it believes that the loan is "irregular."

Does anyone know how APRWin decides something is regular or irregular? I was hoping to find a manual that spells this out, but after searching, I've got nothing.

For anyone not familiar with these types of loans, the P&I payments are fixed (as it the rate), but there is a decreasing MI-like addition made on a monthly basis. This amount decreases on a yearly basis based on the projected loan amount at the time. So when entering this in, there is 30 different payment streams for the loan?

Help?

Okay, now I feel foolish. I found the manual in the Help section of the program. It does indicate that anything with more than 3 payment streams will be considered "irregular."

The next questions is, does this seem like an irregular loan?

Yes, it has 30 different payment streams.

A thorough explanation of "regular/irregular" is here.

This may be a stupid question but this is new to me so..... Does the payment amount I use to calculate APR include tax and insurance escrow? Or only the monthly amount of the USDA fee? (Which I realize will be 30 different payments streams.... Argh.)

The fees for the (P & I) loan and USDA insurance (it's insurance to protect the creditor and therefore a finance charge).

Yes, you will have at least as many payment streams as there are steps in the USDA fee. If there is an odd final payment, that will add one additional stream if you choose to be that precise.

Thank you, both! This will be so fun.

trinia, I just found this calculator for figuring out Rural annual payments. Be sure to open each of the tabs at the bottom. One lets you do an amotization table. But the Annual Fee Schedule is the one you'll want to run APRWin.