topic Re: question for ''candoattitude'' in Mortgage Loans

question for ''candoattitude''

Anonymous — Mon, 19 Jan 2009 05:07:16 GMT

I read a post you typed below about the USDA Guaranteed :Loan Program. I want to make sure I understood you correctly. Did you say that the income tables are being redone and take effect in March and to get an idea of what they will look like, for 1 person I should look at the column for a family of 4 on the chart that you linked?

There are two numbers. I assume that they are two different programs. I missed the top one by two thousand but fall well within the bottom one. Which one has the 100% financing?

I have just started to look for houses. I was all prepared to go FHA, have my 3.5%, my credit is fine with ficos in the 700's but if I can get something better..

thanks for your info.

and I have another question....

Anonymous — Mon, 19 Jan 2009 05:10:18 GMT

I noticed that the table says "adjusted income". How do I figure that out? My gross for the year is about 3,000 more than the table says. What do I deduct to adjust it?

Re: question for ''candoattitude''

Anonymous — Mon, 19 Jan 2009 06:32:58 GMT

Hi teacherhere,

Yes, the charts are being redone and will officially go into effect

on or about March 20th, 2009.

As you can see on the current chart, there are 8 separate income levels.

Once the charts are redone, there will only be 2 income levels --- one for

1-4 person households (the 4-person limit) and the other for 5-8 person

households (the 8-person limit).

The top row for "Low Income" is the USDA's Direct Loan program,

where funding for a mortgage comes directly from the USDA.

This program is designed for applicants with low and very low income

within a local area. To qualify for this program, applicants can only earn

up to 80% of the income shown on the chart (just multiply times .80).

Loans are for 33 to 38 years and the interest rate can be as low as

1% fixed.The rate is set by the USDA based on your ability to pay.

Your local USDA office handles all the paperwork for this mortgage.

The bottom row that says "Mod Inc Guar Loan" is the USDA's

Guaranteed Loan program, where a local bank makes the loan and

sets the interest rate, but the USDA insures it in case of default.

This program is designed for applicants with moderate income within

a local area. Applicants can earn up to 115% of the income shown

on the chart (multiply by 1.15). Loans are for 30yrs and the best rates

right now are 5.3 to 5.5% fixed. A 620 middle FICO score is needed

to qualify for the best rates. The local bank or lender handles all the

paperwork for this mortgage.

Both loan programs are 100% financing, so no downpayment is

necessary.

So essentially, how much money you earn determines which program(s)

you qualify for. The USDA has no official FICO requirements for either

program; however, for lenders making Guaranteed Loans, the higher your

middle FICO score the lower your interest rate. And like I said, a middle

score of 620 qualifies you for the best interest rates. Folks here in the forum

are having excellent results with Chase and Wells Fargo. Both banks offer

Guaranteed Loans.

I hope this helps you. Everything will be much clearer when the modified

charts are actually printed and made available in March.

I think that covers it. Have a great week!

CanDo

"The right attitude is everything"

Message Edited by CanDoAttitude on 01-18-2009 10:32 PM

Re: question for ''candoattitude''

Anonymous — Mon, 19 Jan 2009 06:33:37 GMT

thanks for your explanation. I then don't qualify for the direct program as my income is just over that limit instead of 80% of it. I do fall well within the income guidelines for the guaranteed program with the new chart. With the old one, I missed the income guidelines by a few thousand as well. The 100% financing helps so much. While I was prepared for a 3.5% FHA payment, this will make it so much easier. My credit is fine. All scores over 700, no baddies on two of the reports as well. The third one has a paid judgement.

What ratios are they looking for with the USDA programs?

Re: question for ''candoattitude''

Anonymous — Mon, 19 Jan 2009 06:47:23 GMT

Hi again,

That was a quick response.

Another forum member who just closed on a

Guaranteed Loan provided the answer to your question.

It's 29/41. But you can get a waiver for a higher ratio

if necessary. The forum member did, in fact, need a

waiver for a higher ratio and got it no problem. He didn't

say what his final ratio was, though.

I don't know the ratios for the Direct Loan program.

Perhaps someone else knows, or you can call your local

USDA office to find out.

Hope this helps.

CanDo

"The right attitude is everything"

Message Edited by CanDoAttitude on 01-18-2009 10:47 PM

Re: question for ''candoattitude''

Anonymous — Mon, 19 Jan 2009 06:49:33 GMT

thanks again and one more question if you don't mind...two questions..

I was just reading online about the quaranteed program...I have one paid judgement on one of the credit reports...the fico scores is still above 700....it was paid in Sept but the judgement is several years old with nothing else negative in the last 10 years....do you think it will be a problem? I read something about no judgements in the last 12 months.

Second questions is that is it true that no mortgage insurance is needed? Isn't that the same as the PMI I read about? Won't that reduce the payments some? They do a 2% funding fee instead?

Re: question for ''candoattitude''

WannaHouse — Mon, 19 Jan 2009 07:06:07 GMT

As long as the judgement is paid, AND SHOWS it is paid, then it will be fine for the Guaranteed program. The direct program requires everything to be at least 12 months old.

And it is true that your do not have to pay PMI for either program.

Re: question for ''candoattitude''

Anonymous — Mon, 19 Jan 2009 07:10:21 GMT

yes it absolutely shows that it is paid. I sent a copy of the court paper to Equifax myself instead of waiting for the company to report. I then got a letter from Equifax telling me that they had updated the file. I then got a copy of my report to verify and it was done as I was told.

Ya know, I am so glad that I waited to buy. I wanted so badly to do this over the summer but now since I waited I have an excellent shot at this program which will keep my money in my savings! Good things come to those who wait!

Re: question for ''candoattitude''

WannaHouse — Mon, 19 Jan 2009 07:24:11 GMT

Make sure you hold on to the copy of the judgement satisfaction. They will probably want that at closing.

If everything else looks good, I woul go ahead a get pre-approved. Make sure you do all your searching in about 1-2 weeks time. This way, the inquiries will all be lumped as one.

Good luck!

Re: question for ''candoattitude''

Anonymous — Mon, 19 Jan 2009 07:31:12 GMT

What WannaHouse posted re PMI and the judgment

are both correct. You don't have to worry about the

judgment and PMI is not needed for USDA loans.

However, what I posted about the chart IS correct.

The top line that says "Low income" is for the Direct Program.

The bottom line that says "Mod Inc Guar Loan" is for the

moderate income Guaranteed Loan program. Just the difference

in numbers demonstrates that.

Granted, the heading at the top of the page does say

"Guaranteed Housing Program Income Limits" , but that's

a general statement. Both programs were created to

"guarantee" housing for anyone who qualifies, but the

difference in the programs is in where the funding comes from.

Click on the link for your state and see for yourselves:

http://www.rurdev.usda.gov/rhs/sfh/sfh%20guaranteed%20loan%20income%20limits.htm

CanDo

"The right attitude is everything"

Re: question for ''candoattitude''

kilowatt1 — Mon, 19 Jan 2009 18:26:41 GMT

Hello cando.

Are you sure that 115% of the "Maximum Adjusted Household Income" shown on the chart is allowed? The reason I ask is because if you complete the worksheet using the family of 4 figure of $70,750.00, any income level above that amount will report as ineligible. If 115% of $70750.00 is allowed, then an income up to $81,362.50 should report back as eligible. I may be wrong, but I think that the 115% is already included in the "Maximum Adjusted Household Income" amount. I say this because if you take 115% of $61,500.00, which I believe is the latest U.S. median family income, you come up with $70,725.00 which I assume the goverment rounds up to $70,750.00 as shown in the chart. You'll notice on the charts that $70,750.00 is the lowest maximum income for a 4 person household regardless of the location, so that figure must be based on 115% of the U.S. family median income, which is generally higher than median income for most rural areas.

What do you think?

Kilowatt

Re: question for ''candoattitude''

Anonymous — Mon, 19 Jan 2009 23:51:04 GMT

Hi kilowatt,

Yes, it's true that for most of the country the maximum

moderate income charted for a family of 4 is $70,750.

But if you click on the link above and look at Maryland,

the 4-person limit for Baltimore is $88,400. If you click on

California, the 4-person limit for Orange County is $106,950.

Click on Nevada and you'll find that the 4-person limit for

Douglas County is $83,000. And in Austin, TX the moderate

income stated for a family of 4 is $81,800.

So no, the max income is not $70,750 for a family of 4

regardless of location. But for most locations, you are correct.

I can see where you believe that the 115% is already included

in the Moderate Income chart, but that's not what I've been told.

However, I'll be checking back with my mortgage broker tomorrow

to double check on this (since today is a holiday). Obviously, it's

important that we get the information correct. So I'll let you know

what I find out and then report back to the forum sometime tomorrow.

Thanks for your question, kilowatt. Enjoy the evening!!!

CanDo

'"The right attitude is everything"

Message Edited by CanDoAttitude on 01-19-2009 03:51 PM

Re: question for ''candoattitude''

WannaHouse — Wed, 21 Jan 2009 19:58:07 GMT

Deleted

Message Edited by WannaHouse on 01-21-2009 01:58 PM

Re: question for ''candoattitude''

Anonymous — Tue, 20 Jan 2009 12:03:44 GMT

That's a fair point, WannaHouse.

However, the vast majority of questions regarding

USDA loans in this forum pertain to guaranteed

loans from banks, not direct loans from the USDA.

Basically, people should follow the money.

If you want to know about the Direct Loan

program, contact your local USDA office.

If you want to know about the Guaranteed Loan

program, speak directly to a lender who makes

those loans. We do our best to share information as

we understand it, but sometimes things fall between

the cracks. So at the end of the day, it's always best

to speak with the people who actually make the loans.

As I posted yesterday, I'll be speaking with my

mortgage broker later today to follow up on kilowatt's

question re moderate income limits for Guaranteed

Loans and to see if there are any further updates.

I'll post later this evening to share my findings with

everyone.

Make it a great day!!!

CanDo

"The right attitude is everything"

Message Edited by CanDoAttitude on 01-20-2009 04:03 AM

Re: question for ''candoattitude''

Anonymous — Tue, 20 Jan 2009 23:48:38 GMT

Hi kilowatt,

First of all, Happy Inauguration Day!

As promised, I'm getting back to you with an answer to your question

regarding modified income limits for the Guaranteed Loan program.

I also took the opportunity to ask a couple of other questions that came

up in the forum recently.

It took a while for my mortgage broker to get back to me because they

are SWAMPED right now with refis and new loan applications, but I

asked her three (3) questions:

1) Do the moderate income limits as stated on the charts already include

the 115% adjustment, or do applicants need to multiply by 1.15 to

determine the true income limits in their area?

2) The Guaranteed Loan program is designed for Moderate Income families,

but there is a "Low Income" entry on the income chart. Is that a separate

program, or can low income families apply as well?

3) Is the USDA still on track to implement changes to the income charts

by March 20th?

Answers:

--- The answer to question 1 is YES. The income limits as they appear on

the charts already allow for the 115% limit in any given area. Previously,

I was told that they did not allow for this and that applicants should multiply

by 1.15 to determine the true maximum limit that applied to them.

So you were right and I was wrong, kilowatt. My apologies to you and everyone

in the room. It was an honest mistake.

--- The answer to question 2 is YES and NO. Let me explain:

Although the Guaranteed Loan program was originally designed for moderate

income households, there are certain states that allow low income families to

participate in the program thru the use of state bond funds. As we all know,

not all states are in great fiscal shape right now. So depending on where you

live, your state may or may not allow low income applicants to participate in

this program. Since this component of the program applies to low income

families, you are advised to contact your local USDA office for details and to

see if your state has the bond money available to fund this program.

Stated more simply: If your state has the bond funds available, then YES,

low income families can apply. If your state doesn't have the funds, then NO,

they cannot.

--- The answer to question 3 is YES. As of right now, the USDA is still on track

to implement the modified income changes on or about March 20th, 2009. My

mortgage broker also pointed out that more banks are starting to close USDA

Guaranteed Loans before the March 20th date. They'll simply hold them in their

portfolio until the USDA gets their new batch of funding to properly insure them.

Once they are insured, the loans can be packaged and sold. This will allow

banks to replenish their cash so more Guaranteed Loans can be originated.

So there you have it, kilowatt. And once again, please accept my apologies if the

information I previously shared complicated your loan application in any way. Like

everyone else here, I want the mortgage process to go as smoothly as possible.

Have a great evening, Everyone!

CanDo

"The right attitude is everything"

Re: question for ''candoattitude''

kilowatt1 — Wed, 21 Jan 2009 00:20:08 GMT

Thanks for the followup CanDo.

I am not currently in search of a mortgage myself, but I did tell my daughter and son in law a few weeks ago that they would not qualify for a USDA guaranteed loan based on thier income of $75,500.00. After reading your earlier post I was just concerned that I had possibly misled them. Again, thanks for following up on it for us.

Take care.

Kilowatt

Re: question for ''candoattitude''

Anonymous — Wed, 21 Jan 2009 01:31:32 GMT

You're welcome, kilowatt. I'm happy to help

where I can.

And one clarification: By law, all states are allowed to participate

in federal loan programs as long as they have adequate funding to offer

them to qualified applicants....especially when the money is in the form

of bond revenue. I didn't want to leave the impression that some states

can take part in the loan programs while others can not. But obviously,

there must be enough money available for this to happen...

CanDo

"The right attitude is everything"

Message Edited by CanDoAttitude on 01-20-2009 05:31 PM

Re: question for ''candoattitude''

WannaHouse — Wed, 21 Jan 2009 19:57:12 GMT

Deleted by WannaHouse

Message Edited by WannaHouse on 01-21-2009 01:57 PM

Re: question for ''candoattitude''

Anonymous — Wed, 21 Jan 2009 11:27:35 GMT

People are free to offer whatever they like.

But no one "assumes" anything in this room.

That's why we ask questions and help each

other as best as we can.

CanDo

"The right attitude is everything"

Message Edited by CanDoAttitude on 01-21-2009 03:27 AM