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USDA RURAL DEVELOPMENT PowerPoint Presentation
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USDA RURAL DEVELOPMENT

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deacon-barlow

USDA RURAL DEVELOPMENT - PowerPoint PPT Presentation

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USDA RURAL DEVELOPMENT
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  1. USDA RURAL DEVELOPMENT

  2. WHAT IS RURAL DEVELOMENT? • Census-based • US Department of Agriculture • Guaranteed against loss by USDA • Pays lender if borrower defaults

  3. WHO CAN DO USDA LOANS? • Approved lender with HUD, VA, Fannie Mae or Freddie Mac • State Housing Agency • Farm Credit Service

  4. IT’S THE GOVERNMENT! • Pays for itself – doesn’t use taxpayer money • Funded through the 2% Funding Fee (which can be financed into the loan!)

  5. LOAN PURPOSE • Purchase new construction • Purchase existing home • Refinance (only if currently have a direct Rural-Development Loan) • Purchase Mobile Home (very limited; difficult)

  6. REASONS TO NOT USE RURAL DEVELOPMENT FOR A BUYER • Geographical Limitations • Maximum Income limitations • Can’t buy house with in-ground pool (can try for exception to this) • Primary Home Only

  7. INCOME QUALIFICATIONS • Household adjusted annual income cap uses ALL occupants whether on the loan or not, that are 18 and over • Counts gross income, overtime, commission, bonuses, net self-employment income, Social Security, Child Support, unemployment, etc. • Based on family size & county where property is located • http://eligibility.sc.egov.usda.gov

  8. ADJUSTMENTS TO INCOME • $480/Year per minor or full-time student • Verified child care expenses • $400/Year if borrower or co-borrower is over 62 or disabled

  9. * Broward, Pinellas and Monroe are NOT eligible

  10. GEOGRAPHICAL QUALIFICATIONS • ALL of Walton County • Destin • Niceville • Valparaiso • Crestview • West of Hurlburt in Okaloosa County • ALL of Santa Rosa County

  11. GEOGRAPHICAL LIMITATIONS FT. WALTON BEACH & SHALIMAR DO NOT QUALIFY

  12. BENEFITS TO BUYERS • Can finance 102% of appraised value, without getting cash back at closing (can get EMD, but no more) • No Monthly Mortgage Insurance • 30-Year fixed rate with very competitive rates • No loan limits (DTI/income limitations) • Closing costs can be financed • Unlimited gift or seller contributions • No reserves required

  13. Sales Price: Appraisal: Seller Paying:EMD:Closing/Prepaids2% Funding Fee: $100,000 $110,000 $0 Closing Costs $500 $3,000/$2,000 $2,000 Can Finance: $107,000 and get $500 EMD back

  14. Sales Price:Appraisal:Seller Paying:EMD:2% Funding Fee: $100,000 $105,000 ALL Closing/Ppds. $500 $2,000 Can Finance: $102,000 and get $500 EMD back

  15. QUALIFYING • Debt to Income Ratios = 29/41 • Debt to Income Ratios = 31/43 (for homes built after January, 2001) • Can go higher on DTI w/compensating factors: • 660+ Credit Score • Zero or very little payment shock • 2+ years continuous employment at same job • Rental/Housing history for 12 months required if credit score 619 or less (cancelled checks); if 620 or higher, not required

  16. OTHER CRITERIA • Do not own a dwelling currently • Lack sufficient resources to secure conventional credit • US Citizen, Permanent Resident, Resident Alien, or Qualified Alien • Have legal capacity to enter contract • Primary Residences Only

  17. PROPERTY ELIGIBLITY • Must have access from a street, road or driveway • Site value less than or equal to 30% of total value • Leasehold estates (where applicable)

  18. OTHER PROPERTY REQUIREMENTS • If on a well & septic, must be tested and meet county requirements • Pest inspection required – deficiencies must be corrected • Escrow for repairs under certain limited circumstances and will be 150% of cost • New construction – must have warranty

  19. FUNDS AVAILABLE • RD has annual amount of funds appropriated by Congress • Funds must be reserved by the lender but can’t be until there is a fully-executed sales contract • Reservation is valid for 60 days • Have been known to run out before end of fiscal year

  20. QUESTIONS?