USDA OVERVIEW- info from lender

[moondog7324]

 USDA Rural Housing Loan Program Overview  PROGRAM BENEFITS 

• FINANCING – 102% FINANCING BASED ON APPRAISED VALUE
• TERM – 30 YEAR FIXED
• REFINANCE OPTION – YES – Rate reduction only – no cash back – Reduced Gaurantee fee of .5%  Only existing GRH and Section 502 direct loans are eligible for refinance
• Mortgage Insurance – No monthly Mortgage insurance. One-time gurantee fee of 2%
• Payment reserves – No payment reserve requirement
• Downpayment – No downpayment
• First-time homebuyer – No first time home buyer requirement
• Seller Concessions – No maximum.  If greater than 6%, comment from the appraiser required
• Gifts– 100% gifting permitted.  Donor must be disinterested third party.

 INCOME AND RATIOS 

• Ratios – 29/41 – exceptions encouraged with compensating factors and RD concurrence
• Non-Occupant Co-Borrower – Non-occupant co-borrowers not permitted unless approved by RD
  • Installment debt – include all installment debt greater than 6 months
  • Primary Income – Two-year historty
  • Self-employment – Two-Years 1040s and P&L
  • Alimony/Child support – 12-month history, with proof of 3 years continuance
  • Part-time, Over-time & Bonus – 12 – Month history
  • Disability benefits – Benefits letter, 3 years continuance and gross up 125%
  • SSI Benefits – Award letter or two months bank stmts, 3 year continuance and gross up 125%
  • Salary increases – Salary increases with 60 days of the first patyment due date are acceptable
  • Maximum income – Use RD Moderate income limits – http://eligibility.sc.egove.usda.gov
•  Credit  
  • Credit Score – No minimum credit scores
  • Late Payments – 1X30 permitted in last 12 months with explanations – Exceptions may be granted if your borrower has 620 middle score or greater
  • Bankruptcy/Foreclosure – Chapter 7 and 13 must be discharged for 3 years – Foreclosures must be completed 3 years ago- Exceptions may be granted if your borrower has a 620 mid score or greater
  • Judgments – Must be paid off for at least 12 months – Exceptions may be granted if your borrowers have a 620 score or greater
    
    
    • Verifications of Rent – if the applicant’s middle score is under 620 a VOR is required for the most recent 12 months.
    • Previous Housing payment – Not required
    • Non- Traditional Credit – Acceptable if no credit is available
    • Credit report – RMCR or Tri-Bureau merged
    • Homebuyer education – Case by case basis or when required by RD
     FUNDS FOR CLOSING  
    • Closing Costs – All closing cost may be financed, except discount points unless borrower is below the RD low income limit, then discounts may be financed
    • Seller Concessions – All closing cost and prepaids may be paid by seller concessions
    • Gifting – 100% gifting acceptable from disinterested third party
    • Cash contribution – No minimum cash contribution from borrowers
    • Unsecured funds – Borrowing of unsecured funds allowed with 660 credit score
     PROPERTY REQUIREMENTS 
    • Eligible areas – Property must be located in a RD eligible area http://eligibility.sc.egove.usda.gov
    • Other Real Estate Owned – Borrowers must own adequate housing.
    • Occupancy – Primary residence only
      • Property Time – Single family or RD eligible condo/PUD
      • Swimming pools – No in-ground swimming pools (above ground permitted)
      • Thermal Certification – thermal insulation certifications required
      • Home Inspection Adequacy Certification – State specific adequacy certification or HUD-VC sheet required on all existing dwellings
      • Termite inspections – All areas as required by RD
      • Well/Septic inspections – 100% required
      • Repairs – 100% of repairs may be financed based on as-improved value.  If work is not complete prior to closing an escrow hold back may be established at 150% of repair cost.
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[moondog7324]

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[moondog7324]

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[Anonymous]

I wanted to say thank you for the information.