USDA Mortgage Presentation

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USDA Mortgage Presentation

  1. 1. USDA Rural Housing Mortgage Ed Gillespie, First Priority Financial (916) 849-9200
  2. 2. USDA Section 502 Guaranteed Rural Housing Loan Program <ul><li>Providing home ownership opportunities to moderate income households in rural areas. </li></ul><ul><li>100% LTV </li></ul><ul><li>3.5% Guarantee Fee (purchases) </li></ul><ul><ul><li>October, 2011: 2% initial GF and 0.30% annual </li></ul></ul><ul><li>30 year fixed rate loan </li></ul>
  3. 3. Property and Income Eligibility <ul><li>http:// eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do </li></ul><ul><li>Property must be in a designated rural area <click> “ Property Eligibility –Single Family Housing” </li></ul><ul><ul><li>If property eligibility is ‘undetermined’, obtain written confirmation from the local USDA office of property acceptance. </li></ul></ul><ul><li>Household income maximums; income of ALL occupants is included <click> Income Eligibility – Single Family Housing </li></ul>
  4. 4. Household Income Eligibility <ul><li>Not the same as qualifying income </li></ul><ul><ul><li>Non-borrowing spouse </li></ul></ul><ul><ul><li>Must include sources not eligible as qualifying income. </li></ul></ul><ul><li>Household income maximum is determined at the county level </li></ul><ul><li>All income sources for all persons living in the home must be included </li></ul>
  5. 5. Property Eligibility <ul><ul><li>1-unit properties </li></ul></ul><ul><ul><li>Borrowers cannot own other homes </li></ul></ul><ul><ul><li>Cannot be the possibility of any income source from land or buildings </li></ul></ul><ul><ul><li>Geographic differences </li></ul></ul><ul><ul><ul><li>Generally, can’t include the value of swimming pools for lending purposes </li></ul></ul></ul><ul><ul><ul><li>Incidental outbuildings – maybe, if no value given </li></ul></ul></ul>
  6. 6. USDA Loan Type <ul><ul><li>30 year fixed rate – no other options </li></ul></ul><ul><ul><li>LTV is based on value only, not sale price </li></ul></ul><ul><ul><li>Maximum 100% LTV (base, before Guarantee Fee) </li></ul></ul><ul><ul><ul><li>3.5% guarantee fee (3.62694% if financed) </li></ul></ul></ul><ul><ul><ul><ul><li>As of 10/11: 2% initial GF and 0.30% annual </li></ul></ul></ul></ul><ul><ul><li>The only refinances allowed are R/T transactions of existing USDA loans </li></ul></ul><ul><ul><ul><li>1.00% Guarantee Fee on refinances </li></ul></ul></ul>
  7. 7. Credit Reports <ul><li>Borrower names on credit report must exactly match how they take title. </li></ul><ul><li>Credit Scores </li></ul><ul><ul><li>All borrowers must have a minimum representative credit score of at least 640. </li></ul></ul>
  8. 8. Credit items <ul><li>Collections (and charge-offs, if they show a balance outstanding): all must be paid by closing. </li></ul><ul><li>Judgments and tax liens: none currently outstanding </li></ul><ul><li>Late consumer payments (revolving and installment): Overall credit history (including histories beyond the past 12 months) must not show any pattern of late payments or other derogatory credit. Any 60-day consumer lates should be isolated events. </li></ul><ul><li>Housing payments: no 30-day lates in the past 12 months and no more than 1X30 in past 24 months </li></ul><ul><li>Loans not meeting the bankruptcy, foreclosure, or short sale/pre-foreclosure dates as listed below are not eligible. </li></ul><ul><ul><li>BK: 3yrs (multiple BKs 7) </li></ul></ul><ul><ul><li>Foreclosure/short-sale/deed-in-lieu: 3 yrs </li></ul></ul>
  9. 9. Questions? Assistance? Ed Gillespie, First Priority Financial (916) 849-9200

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