USDA $0 Down Housing Loan - AmeriFirst Financial, Inc.

USDA Rural Housing The Vaught Team @

What is Rural Development? The Rural Housing Service (RHS) program provides very-low, low and moderate income residents with better access to affordable housing finance options with little or no down payment or out-of-pocket costs.

What is Rural Development?
Census-based
US Department of Agriculture
Guaranteed against loss by USDA
Pays lender if borrower defaults
Funded through the 2% Funding Fee
(which can be financed into the loan!)

What is Rural Development?
Two USDA programs are available:
Direct (low income up to $________ for 1-4 ppl)
Guaranteed (income up to $_______ for 1-4 ppl)
ASK US ABOUT THE MAXIMUM AMOUNT PER YOUR COUNTY.

Advantages & Benefits
Not just for first-time buyers – anyone can qualify (based on income and property restrictions)
No loan limits (DTI and income limitations)
No down payment
Can finance 102% of appraised value
Low Monthly Mortgage Insurance (0.3% monthly for the life of the loan)

Advantages & Benefits (cont.)
No cash reserves required
Closing costs can be financed or gifted (gifts are allowed from relatives who are NOT members of the household)
Up to 6% seller contributions allowed
Repairs may be financed up to 100% of appraised value or “as improved” value
No FHA approval needed
Can partner with other funding sources, such as state bond programs

Program Features
Owner-occupied principal residence ONLY
30 year fixed rate with competitive rates
2/1 buydown permitted (qualify at note rate)
Borrowers must qualify with both income and geographic requirements
Non-occupant co-borrowers are NOT permitted
Borrower can be permanent or non-permanent resident alien, and must have a valid SS#
Cannot own another property (current home must be sold prior to or concurrently with the new purchase)

Other Features
Streamline documentation with 660 or higher FICO (rental history waiver – certain derogatory credit waivers allowed)
Credit waivers with compensating factors
DTI waivers (above 29/41) with compensating factors
Student loans must be included in ratios
Reservation of funds required
Appraisals prepared by HUD approved appraisers can eliminate the need for home inspection

Credit History
Non-traditional credit is allowed (3 to 5 sources of credit is required).
Outstanding collection accounts, regardless of age, that are currently delinquent are NOT allowed. Collections must be paid (not including medical collections).
Any outstanding judgment obtained by the US in a federal court is NOT allowed.
Outstanding tax liens, no matter their age, are unacceptable.
BK not allowed in the last 36 months.

Credit History
If any of these are part of the borrowers credit history, they will not be able to obtain USDA financing:
Judgments caused by nonpayment that is currently outstanding or has been outstanding in the past 12 months.
2 or more rent/mortgage payments paid 30 days or more past due within the past 3 years.
Any collections paid in the past 12 months.
Mitigating circumstances may be considered in the event of inaccurate credit information.

Eligible Borrowers
US citizens
Non-US citizens, provided the borrower satisfies all of the following requirements:
Occupies the property as a permanent residence; and
Has a social security number; and
Is eligible to work in the United States; and
Is a Qualified Alien with proper documentation

Income Limits
Use of the eligibility website is suggested to obtain adjusted eligible income per household
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Eligible deductions may be used for income qualification such as:
Household members under 18 years of age
Disabled or handicapped members of household over 18 years of age
Full-time students 18 or older
Individuals 62 years of age or older
Annual childcare expense for children up to 12 years of age if both parents are employed full-time

Income Limits by County Below is an example of the income limits where Sue Pullen resides. Be sure to delete the box below and input your local county info. You can find your local county information by clicking this link: http://www.rurdev.usda.gov/HSF-Guar_Income_Limits.html ---------- Adjusted Income Limits ---------- County 1Person 2Persons 3Persons 4Persons 5Persons 6Persons 7Persons 8Persons Pima $ 49,550 $ 56,600 $ 63,700 $ 70,750 $ 76,400 $ 82,050 $ 87,750 $ 93,400 Maricopa $ 51,650 $ 59,050 $ 66,400 $ 73,800 $ 79,700 $ 85,600 $ 91,500 $ 97,400 Other AZ $ 49,550 $ 56,600 $ 63,700 $ 70,750 $ 76,400 $ 82,050 $ 87,750 $ 93,400

Property Requirements
Properties must be located in RD eligible areas
Single family detached
Condominiums/PUDs warrantable to RD guidelines
If on a well and septic, must be tested and meet county requirements
Termite inspection required – deficiencies must be corrected
New construction must have warranty
No existing manufactured housing
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?Home

Property Requirements
Properties cannot be located in a flood zone (exceptions can be made)
Leaseholds are allowed if long-term leasing of homesites is well established local practice
The value of the site cannot exceed 30% of the total value of the property
Property must have dependable water and waste disposal systems approved by local authorities
Property must have access to a paved or all-weather surface street, road or driveway
Properties with pools typically are not acceptable (the value of the pool is subtracted from the appraised value)

Realtor Benefits
More buyers qualify to buy your listing
Quick turn times
Great for rural listings
No maximum loan amount
No down payment required
Closing costs can be included in the loan (up to the appraised value)
Low monthly mortgage insurance
No "creative financing" needed

Resources
USDA website to access handbook and Administrative Notices
www.rurdev.usda.gov/regs/regs_toc.html#1980
USDA National Office website
www.rurdev.usda.gov

JUSTIN VAUGHT LICENSED LOAN OFFICER 480-682-6640 [email_address] www.AZFHAMortgage.com

USDA $0 Down Housing Loan - AmeriFirst Financial, Inc.

by JustinVaught on Jul 16, 2010

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USDA $0 Down Housing Loan - AmeriFirst Financial, Inc. — Presentation Transcript