AMS Rural Housing We are financing 102% of the American dream!

AMS Rural Housing Justin Vaught Sr. Mortgage Banker [email_address] (480)299-8565 www.JustinVaught.net

Justin Vaught

Sr. Mortgage Banker

[email_address]

(480)299-8565

www.JustinVaught.net

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.

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.

AMS Rural Housing Guaranteed Rural Housing (GRH) Guaranteed Rural Housing – New Construction Pilot

Guaranteed Rural Housing (GRH)

Guaranteed Rural Housing –

New Construction Pilot

GRH Program Benefits No Money, No Problem Borrow more and pay less 15 Basic Rules Rurally Nice Home

No Money, No Problem

Borrow more and pay less

15 Basic Rules

Rurally Nice Home

Borrowers Cash to Close Average Cash to Close $158.75 Loans with $0 Cash to Close 60%

Average Cash to Close $158.75

Loans with $0 Cash to Close 60%

How do we do that? No Down payment Finance Closing Costs and Prepaids Unlimited Seller Contributions Unrestricted Gift Funds

No Down payment

Finance Closing Costs and Prepaids

Unlimited Seller Contributions

Unrestricted Gift Funds

What closing costs Can be financed? Lender fees Escrows and first year insurance Third party fees

Lender fees

Escrows and first year insurance

Third party fees

How much can be financed? 100% LTV of Appraised Value Appraisal $150,000 Purchase Price $ 145,000 Closing costs/pre-paids $5,000

100% LTV of Appraised Value

Appraisal $150,000

Purchase Price $ 145,000

Closing costs/pre-paids $5,000

Borrow More Pay Less Guaranteed! Guarantee Fee = Loan amount x 2.0%

Guarantee Fee =

Loan amount x 2.0%

Guaranteed to Pay Less! One time, up-front at closing May be financed into loan amount ** Above the Appraised Value ** No monthly MI premium

One time, up-front at closing

May be financed into loan amount

** Above the Appraised Value **

No monthly MI premium

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

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

GRH Program Benefits 15 Basic Rules

15 Basic Rules

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

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

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

5) Full documentation, or ALT Doc

6) 24-month employment history

7) 12 months ancillary income

-Bonus/Overtime/Part-time

-SSI

-Disability

Rule 8 - Ratios 29 and 41% - Limited compensating factors - All debts > 6 months counted

29 and 41%

- Limited compensating factors

- All debts > 6 months counted

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

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

Rule 9 Credit Scores Tri-merged or Full RMCR 620 is the magic score! Middle of 3, or lower or 2

Tri-merged or Full RMCR

620 is the magic score!

Middle of 3, or lower or 2

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

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

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

Collections opened in last 12 months

Unpaid collections w/o repayment plan

Debts written off in last 36 months

Clouded CAIVR’s number

Mitigating Circumstances Circumstances were of temporary nature Beyond the applicants’ control Circumstances have been removed

Circumstances were of temporary nature

Beyond the applicants’ control

Circumstances have been removed

Mitigating Circumstances- Examples Loss of job Delay or reduction in government benefits Increased expenses, illness or death Dispute over defective goods or services

Loss of job

Delay or reduction in government benefits

Increased expenses, illness or death

Dispute over defective goods or services

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

Late pays after bankruptcy

Bad credit with a bad letter (or, no letter)

Never had a housing payment, already have credit problems

Rules 10-12 - Credit Explain and support adverse credit Housing – get 24, verify 12 12) First time homebuyers, students

Explain and support adverse credit

Housing – get 24, verify 12

12) First time homebuyers, students

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

Verify any cash to close > 2% or

$1,000 whichever is lower

14) Submit gift documentation

15) Provide terms of unsecured loan

Rurally “not so” nice home

Rurally “not so” nice home

Rurally “not so” nice home

Rurally “not so” nice home

Rurally Nice House

Rurally Nice House

Rurally Nice House

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)

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)