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Ams Rural Housing

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USDA $0 Down Home Loan

USDA $0 Down Home Loan

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Transcript

  • 1. AMS Rural Housing We are financing 102% of the American dream!
  • 2. AMS Rural Housing
    • Justin Vaught
    • Sr. Mortgage Banker
    • [email_address]
    • (480)299-8565
    • www.JustinVaught.net
  • 3. AMS Rural Housing
    • The AMS Rural Housing program is dedicated to the preservation of rural communities. We partner with Rural Development, a division of the US Department of Agriculture, to help thousands of mortgage originators throughout the country put their customers into a Guaranteed Rural Housing (GRH) loan.
    • This program, administered through the US Department of Agriculture, features 102% financing for qualified moderate-income families looking to purchase single-family homes. For borrowers with little or no cash, it’s ideal since they need no down payment and no funds for closing.
  • 4. AMS Rural Housing
    • Guaranteed Rural Housing (GRH)
    • Guaranteed Rural Housing –
    • New Construction Pilot
  • 5. GRH Program Benefits
    • No Money, No Problem
    • Borrow more and pay less
    • 15 Basic Rules
    • Rurally Nice Home
  • 6. Borrowers Cash to Close
    • Average Cash to Close $158.75
    • Loans with $0 Cash to Close 60%
  • 7. How do we do that?
    • No Down payment
    • Finance Closing Costs and Prepaids
    • Unlimited Seller Contributions
    • Unrestricted Gift Funds
  • 8. What closing costs Can be financed?
    • Lender fees
    • Escrows and first year insurance
    • Third party fees
  • 9. How much can be financed?
    • 100% LTV of Appraised Value
    • Appraisal $150,000
    • Purchase Price $ 145,000
    • Closing costs/pre-paids $5,000
  • 10. Borrow More Pay Less Guaranteed!
    • Guarantee Fee =
    • Loan amount x 2.0%
  • 11. Guaranteed to Pay Less!
    • One time, up-front at closing
    • May be financed into loan amount
    • ** Above the Appraised Value **
    • No monthly MI premium
  • 12. FHA vs. GRH Payment Comparison
    • FHA GRH
    • Purchase 98,000 98,000
    • Loan Amount 97,132 100,000
    • P&I 679.16 699.21
    • MIP 39.87 0.00
    • Total 719.03 699.21
  • 13. GRH Program Benefits
    • 15 Basic Rules
  • 14. Rules 1-4 Borrower Eligibility
    • Make enough, but not too much
    • http://eligibility.sc.egov.usda.gov
    • 2) House is in the right place
    • http://eligibility.sc.egov.usda.gov
    • 3) No other real estate owned
    • 4) Pay their own way
  • 15. Rules 5-7 Income
    • 5) Full documentation, or ALT Doc
    • 6) 24-month employment history
    • 7) 12 months ancillary income
          • -Bonus/Overtime/Part-time
          • -SSI
          • -Disability
  • 16. Rule 8 - Ratios
    • 29 and 41%
    • - Limited compensating factors
    • - All debts > 6 months counted
  • 17. 2/1 Buy Down
    • Qualify at the start rate
    • Must have compensating factors
      • Similar housing payment
      • History of savings
      • Post high school education or technical training
      • Verifiable history of salary increases
      • Debt to be paid off between 7 and 12 months
      • Lender or Seller paid
  • 18. Rule 9 Credit Scores
    • Tri-merged or Full RMCR
    • 620 is the magic score!
    • Middle of 3, or lower or 2
  • 19. Unacceptable Credit History Indicators
    • More than 1/30 in last 12 months
    • Bankruptcies/Foreclosures in last 36 months
    • Outstanding tax liens or government debts
    • Outstanding judgments in last 12 months
  • 20. Unacceptable Credit History Indicators
    • Collections opened in last 12 months
    • Unpaid collections w/o repayment plan
    • Debts written off in last 36 months
    • Clouded CAIVR’s number
  • 21. Mitigating Circumstances
    • Circumstances were of temporary nature
    • Beyond the applicants’ control
    • Circumstances have been removed
  • 22. Mitigating Circumstances- Examples
    • Loss of job
    • Delay or reduction in government benefits
    • Increased expenses, illness or death
    • Dispute over defective goods or services
  • 23. Things that make the underwriters really mad!
    • Late pays after bankruptcy
    • Bad credit with a bad letter (or, no letter)
    • Never had a housing payment, already have credit problems
  • 24. Rules 10-12 - Credit
    • Explain and support adverse credit
    • Housing – get 24, verify 12
    • 12) First time homebuyers, students
  • 25. Rules 13-15 Cash to Close
    • Verify any cash to close > 2% or
    • $1,000 whichever is lower
    • 14) Submit gift documentation
    • 15) Provide terms of unsecured loan
  • 26. Rurally “not so” nice home
  • 27. Rurally “not so” nice home
  • 28. Rurally “not so” nice home
  • 29. Rurally “not so” nice home
  • 30. Rurally Nice House
  • 31. Rurally Nice House
  • 32. Rurally Nice House
  • 33. Escrow Holdback for Repairs
    • Determine as-improved appraised value
    • Obtain itemized bid from a licensed contractor
    • Itemize repairs on 1003 and 1980-21
    • RD approvals
    • Set up escrow at closing
    • Complete repairs and inspect
    • (Minimum Repair Amount = $250, Max = lower of 10% or 10K, and must be completed within 30 days. All lender premiums are held in escrow until the work is completed. Chase Administration Fee of $150.00)