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USDA Mortgage Presentation

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Transcript

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