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How to Set Up USDA Monthly Guarantee Fee in Escrow

This article explains how to set up the USDA Monthly Guarantee Fee (disclosed as Mortgage Insurance) for Disclosure.

Step 1. Set Mortgage Insurance In Escrow to Yes

  1. Go to Loan Additional > Mortgage Insurance.

  2. Set In Escrow to Yes.

  3. Click Save.

Step 2. Add Mortgage Insurance in Disclosures

  1. Go to Disclosure > Cost Details.

  2. Click the Edit pencil next to Section G. Initial Escrow Payment at Closing. This opens the Section G edit screen.

  3. Click Add New Escrow in the top right corner.

  4. From the Escrow dropdown list, select Mortgage Insurance.

  5. Enter the number of months you will collect as escrow reserves.

  6. Click Save — the fee will now appear in Section G. Initial Escrow Payment at Closing.

Troubleshooting & Tips

Negative Aggregate Adjustment

If you see a negative adjustment (even after clicking Set Default):

  • Review the Due Date and Payment box for each escrow item to confirm the next payment date, number of months, and monthly payment are entered correctly.

  • Go to Disclosure > Cushion Details to review the year’s projected escrow activity. This may help explain why the adjustment appears negative.

  • Make corrections as needed before continuing.

DocMagic Error
If you get a “low escrow account balance” error when generating documents:
  • Check that Mortgage Insurance is added in Section G. Initial Escrow Payment at Closing.
  • Verify that In Escrow = Yes under Loan Additional > Mortgage Insurance.
  • Ensure a Due Date is set for the escrow item.
  • After making updates, re-run the document package. If the issue persists, check with DocMagic support or program guidelines. 

Questions? Contact us at support@spherelos.com — we’re here to help.