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Guaranteed Loan Program - Single Family Housing- Hello! Linda Rhoades Single Family Housing Specialist USDA, Rural Development 210 Walnut Street 873 Federal Building Des Moines, Iowa 50309 515-284-4723 Phone 515-284-6668 Fax linda.rhoades@ia.usda.gov mary.juergens@ia.usda.gov

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slide1

Guaranteed Loan Program

- Single Family Housing-

hello
Hello!

Linda Rhoades

Single Family Housing Specialist

USDA, Rural Development

210 Walnut Street

873 Federal Building

Des Moines, Iowa 50309

515-284-4723 Phone

515-284-6668 Fax

linda.rhoades@ia.usda.gov

mary.juergens@ia.usda.gov

heather.honkomp@ia.usda.gov

agenda
Agenda
  • USDA, Rural Development
  • Single Family Housing Guaranteed Loan Program
  • Benefits
  • Applicant Eligibility
  • Property Eligibility
  • The Process
  • Resources Available
single family housing guaranteed loan program sfhglp
Single Family Housing Guaranteed Loan Program (SFHGLP)
  • Loan made, held, and/or serviced by an approved SFHGLP lender
  • 90% Guarantee by USDA
home buyer benefits
Home Buyer Benefits
  • 100% LTV + SFHGLP Fee
  • No Mortgage Insurance
  • 30 Year Fixed Rate
  • Partner with other Funding Sources
  • No Loan Limit
  • Fees & Repairs may be Financed
  • Unlimited Gifts or Seller Contributions
  • No Reserves Required
lender benefits
Lender Benefits
  • 100% LTV + SFHGLP Fee
  • Expand Market Share
  • Lender Profitability
  • Guaranteed by Government
  • Lender Underwrites Loan
  • Quality Customer Service
tools available online
Tools Available Online
  • Iowa SFHGLP Handbook http://www.rurdev.usda.gov/ia/rhsg.html
  • Administrative Notices (ANs)
  • Newsletters
rate and term
Rate and Term
  • 30-Year Fixed
  • Interest Rate Set by Approved Lender
    • Capped by RD
  • One-Time GRH Fee
    • 2.00% Purchase Loans
    • .5% Refinance Loans
loan purposes
Loan Purposes
  • Purchase New
    • Stick or Modular
    • Manufactured
  • Purchase Existing
    • Stick or Modular
more loan purposes
More Loan Purposes
  • Repairs
  • Refinance
    • RD Direct
    • Guaranteed Loan
  • Typical Loan Closing Costs
prohibited purposes
Prohibited Purposes
  • Construction Draws
  • Furniture & Personal Property
  • Existing Manufactured Home
  • Income Producing Property
  • Non-Essential Buildings & Land
  • In-Ground Swimming Pool
income
Income
  • Household adjusted annual income may not exceed the MODERATE INCOME limit.
  • Limits based on family size & county where the property is located
  • Income & Property Eligibility web site at: http://eligibility.sc.egov.usda.gov
income verification
Income Verification

Verification of Employment

&

Most Recent Pay Stub

adjusted annual income
Adjusted Annual Income
  • Income of all Adult Household Members
    • Gross income
    • OT, commissions, bonuses, etc.
    • Net self-employment income
    • SS, child support, unemployment, etc.
adjusted annual income25
Adjusted Annual Income
  • Adjustments (Annual Basis)
    • $480 per minor or full-time student
    • Verified child care expenses
    • $400 where borrower or co-borrower is elderly or disabled
repayment income
Repayment Income
  • Adequate & Dependable Income
    • Repayment Income ≠ Adjusted Annual Income
    • OT, commission, self-employment, & bonus income should have a 24 mo. history
    • Earned Income Credit may be added
    • Non-taxable income may be “grossed-up”
repayment ability
Repayment Ability
  • PITI – 29.0%
  • TD – 41.0%
    • Include all debts ≥ 6 months
  • May exceed Ratio Limits with documented compensating factors such as:
    • Zero or little payment shock
    • 620+ Credit score
    • 2+ years on the job
    • And More…
credit verification
Credit Verification
  • Verification
    • Residential Mortgage Credit Report (RMCR)
    • Tri-Merged Credit Report
  • Credit Alert Interactive Voice Response System (CAIVRS)
  • Rent History – 12 months
    • Required only if FICO < 620
credit history
Credit History
  • No Credit Lines ≠ Bad Credit
  • Scores – NO MINIMUM
    • ≥ 620 – no further review of credit
    • < 620 – review per Rural Development Regulations
  • Credit Waiver from Lender’s Underwriter
    • Temporary circumstances,
    • Beyond applicant’s control,
    • and Circumstances removed;

or

    • Justifiable Dispute
risk layering
Risk Layering

The Big Picture

  • LENDER underwrites
  • NO ADDITIONAL Risk Layering if Payment Shock exceeds 100%

(unless there are multiple compensating factors)

other criteria
Other Criteria
  • Do not own a dwelling
  • Insufficient resources to secure conventional credit without the Guarantee
  • U.S. Citizen or Permanent Resident or Qualified Alien
  • Legal Capacity
  • Primary Residence
site eligibility
Site Eligibility
  • Must be in Rural Area

http://eligibility.sc.egov.usda.gov/eligibility

  • Access from a Street, Road or Driveway
  • Environmental Review by Agency Staff
  • Site + Outbuilding Values ≤ 30% of total value
flood mudslide
Flood & Mudslide
  • Existing Property
    • must have flood insurance
    • must be able to afford per ratios
  • New Construction
    • not eligible in flood area in Iowa
appraisal
Appraisal
  • Less Than 6 Months Old
  • ‘As Is’ or ‘As Improved’
  • Properly Licensed or Certified Appraiser
  • Reviewed by Rural Development
inspections
Inspections
  • Lender determines who is qualified to inspect properties.
    • Home Inspection

- or -

    • Documentation per HUD HB 4905.1 and 4150.2
existing property inspections
Existing Property Inspections
  • Certify property is structurally sound, functionally adequate, & in a state of good repair
  • Meet HUD

Handbooks

4905.1 and 4150.2

repairs
Repairs
  • May be included in the Loan
  • Completed prior to issuance of the Loan Note Guarantee
  • Escrow for LNG

permitted when

weather prevents

completion

new construction inspections
New Construction Inspections
  • Three Required Inspections with 1 Year Builder’s Warranty
    • Footing, Rough-In, & Final

OR

  • Final Inspection with 10 year warranty

OR

  • Certificate of Occupancy with a 1 year Builder’s Warranty
new construction
New Construction
  • Stick & Modular
    • Built in accordance with approved building codes-varies by state
    • Certification official must meet Agency approval
    • Conform to Rural Development thermal codes
new construction46
New Construction
  • Manufactured
    • New Units ONLY
    • Agency Approved Dealer Contractors
    • Includes unit & related site development work
    • Must meet Agency thermal standards based on where the unit will be located
    • Unit must be placed on a permanent foundation
sum it all up
Sum It All Up

atios

ncome

nterest Rate

redit

ouse

R

I

I

C

H

the process
The Process

Lender accepts application.

Lender pre-qualifies application.

Lender reserves SFHGLP funds with RD.

Lender processes application.

Lender submits complete application to RD.

the process49
The Process

Rural Development issues Conditional Commitment

within 24 hours.

Lender closes loan.

Lender submits closing package to Rural Development.

Rural Development issues

Loan Note Guarantee to Lender.

iowa offices
Iowa Offices

*See list of offices & contacts.

reservation of funds
Reservation of Funds
  • Fax RD Form 1980-86, Request for Reservation of Funds to the RD office according to property location.
  • Reservation valid for 60 days
slide52

What is in a Package?

See Exhibits H and H-1 of

Iowa’s SFHGLP Handbook

conditional commitment
Conditional Commitment
  • Issued by RD within 24 Hours of Complete Package
  • DO NOT CLOSE without a CC
post closing
Post-Closing
  • If repairs were not escrowed, repairs must be completed prior to issuance of the Guarantee.
  • Submission Checklist – Exhibit I
    • 1980-19, Loan Closing Report
    • Guarantee Fee
    • Lender Certification
  • Loan Note Guarantee issued.
resource websites
Resource Websites
  • Eligibility Websitehttp://eligibility.sc.egov.usda.gov/
  • USDA LINChttps://usdalinc.sc.egov.usda.gov/
  • National RD Websitewww.rurdev.usda.gov/
  • RD Regulationswww.rurdev.usda.gov/regs/
more resource websites
More Resource Websites
  • Administrative Noticeshttp://www.rurdev.usda.gov/regs/an_list.html
  • Fannie Mae Rates

http://www.efanniemae.com/singlefamily/reference tools/net_yields/db_rate_chart.jhtml

  • Credit Alert Interactive Voice Response System (CAIVRS) (301)344-4000

http://www.hud.gov/offices/hsg/sfh/sys/caivrs/ caivrs/cfm

slide59

June is Homeownership Month!

Each year we recognize June as Homeownership Month!

Thank you for helping us celebrate!!