Download - USDA RURAL DEVELOPMENT
USDA RURAL DEVELOPMEN
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WHAT IS RURAL WHAT IS RURAL DEVELOMENT?DEVELOMENT?
Census-basedCensus-based
US Department of AgricultureUS Department of Agriculture
Guaranteed against loss by USDAGuaranteed against loss by USDA
Pays lender if borrower defaultsPays lender if borrower defaults
WHO CAN DO USDA WHO CAN DO USDA LOANS?LOANS?
Approved lender with HUD, VA, Approved lender with HUD, VA,
Fannie Mae or Freddie MacFannie Mae or Freddie Mac
State Housing Agency State Housing Agency
Farm Credit ServiceFarm Credit Service
IT’S THE IT’S THE GOVERNMENT!GOVERNMENT!
Pays for itself – doesn’t use taxpayer Pays for itself – doesn’t use taxpayer
moneymoney
Funded through the 2% Funding Fee Funded through the 2% Funding Fee
(which can be financed into the (which can be financed into the
loan!)loan!)
LOAN PURPOSELOAN PURPOSE Purchase new Purchase new
constructionconstruction
Purchase existing homePurchase existing home
Refinance (only if Refinance (only if currently have a direct currently have a direct Rural-Development Rural-Development Loan)Loan)
Purchase Mobile Home Purchase Mobile Home (very limited; difficult)(very limited; difficult)
REASONS TO NOT USE REASONS TO NOT USE RURAL DEVELOPMENT FOR A RURAL DEVELOPMENT FOR A
BUYERBUYER
Geographical LimitationsGeographical Limitations Maximum Income limitationsMaximum Income limitations Can’t buy house with in-Can’t buy house with in-
ground pool (can try for ground pool (can try for exception to this)exception to this)
Primary Home Only Primary Home Only
INCOME INCOME QUALIFICATIONSQUALIFICATIONS
Household adjusted annual income Household adjusted annual income cap uses ALL occupants whether on cap uses ALL occupants whether on the loan or not, that are 18 and overthe loan or not, that are 18 and over
Counts gross income, overtime, Counts gross income, overtime, commission, bonuses, net self-commission, bonuses, net self-employment income, Social employment income, Social Security, Child Support, Security, Child Support, unemployment, etc.unemployment, etc.
Based on family size & county Based on family size & county where property is locatedwhere property is located
http://eligibility.sc.egov.ushttp://eligibility.sc.egov.usda.govda.gov
ADJUSTMENTS TO ADJUSTMENTS TO INCOMEINCOME
$480/Year per minor or full-$480/Year per minor or full-time student time student
Verified child care Verified child care expensesexpenses
$400/Year if borrower or $400/Year if borrower or co-borrower is over 62 or co-borrower is over 62 or disableddisabled
CountiCountieses
1- 1- persopersonn
2- 2- persopersonn
3- 3- perspersonon
4- 4- perspersonon
5- 5- perspersonon
6- 6- perspersonon
7- 7- perspersonon
8- 8- persopersonn
All Florida & All Florida & Virgin Island Virgin Island Counties Counties EXCEPT those EXCEPT those listed below*listed below*
49,549,55050
56,656,60000
63,763,70000
70,770,75050
76,476,40000
82,082,05050
87,787,75050
93,493,40000
Clay, Duval, Clay, Duval, Nassau and Nassau and
St. JohnsSt. Johns
51,451,40000
58,758,75050
66,166,10000
73,473,45050
79,379,35050
85,285,20000
91,191,10000
96,996,95050
CollierCollier 56,256,20000
64,264,25050
72,272,25050
80,380,30000
86,786,70000
93,193,15050
99,599,55050
106,106,000000
Palm BeachPalm Beach 55,755,70000
63,663,65050
71,671,60000
79,979,95050
85,985,90000
92,392,30000
98,698,65050
105,105,000000
Gadsen, Gadsen, Jefferson and Jefferson and LeonLeon
50,050,00000
57,157,15050
64,364,30000
71,471,45050
77,177,15050
82,982,90000
88,688,60000
94,394,30000
OkaloosaOkaloosa 50,850,85050
58,158,10000
65,465,40000
72,672,65050
78,478,45050
84,284,25050
90,190,10000
95,995,90000
* Broward, Pinellas and Monroe are NOT eligible
GEOGRAPHICAL GEOGRAPHICAL QUALIFICATIONSQUALIFICATIONS
ALL of Walton CountyALL of Walton County Destin Destin NicevilleNiceville ValparaisoValparaiso CrestviewCrestview West of Hurlburt in Okaloosa CountyWest of Hurlburt in Okaloosa County ALL of Santa Rosa CountyALL of Santa Rosa County
GEOGRAPHICAL GEOGRAPHICAL LIMITATIONSLIMITATIONS
FT. WALTON BEACH FT. WALTON BEACH
&&
SHALIMAR SHALIMAR
DO NOTDO NOT
QUALIFYQUALIFY
BENEFITS TO BUYERSBENEFITS TO BUYERS
Can finance 102% of appraised value, Can finance 102% of appraised value, without getting cash back at closing (can without getting cash back at closing (can get EMD, but no more)get EMD, but no more)
No Monthly Mortgage InsuranceNo Monthly Mortgage Insurance 30-Year fixed rate with very competitive 30-Year fixed rate with very competitive
ratesrates No loan limits (DTI/income limitations)No loan limits (DTI/income limitations) Closing costs can be financedClosing costs can be financed Unlimited gift or seller contributionsUnlimited gift or seller contributions No reserves requiredNo reserves required
Sales Price: Sales Price: Appraisal: Appraisal: Seller Seller Paying:Paying:EMD:EMD:Closing/PrepClosing/Prepaidsaids2% Funding 2% Funding Fee:Fee:
$100,000$110,000$0 Closing Costs$500$3,000/$2,000$2,000
Can Finance: $107,000 and get $500 EMD back
Sales Price:Sales Price:Appraisal:Appraisal:Seller Paying:Seller Paying:EMD:EMD:2% Funding 2% Funding Fee:Fee:
$100,000$100,000$105,000$105,000ALL ALL
Closing/Ppds.Closing/Ppds.$500$500$2,000$2,000
Can Finance: $102,000 and get $500 EMD back
QUALIFYINGQUALIFYING Debt to Income Ratios = 29/41Debt to Income Ratios = 29/41 Debt to Income Ratios = 31/43 Debt to Income Ratios = 31/43
(for homes built after January, 2001)(for homes built after January, 2001) Can go higher on DTI w/compensating factors: Can go higher on DTI w/compensating factors:
660+ Credit Score660+ Credit Score Zero or very little payment shockZero or very little payment shock 2+ years continuous employment at same job2+ years continuous employment at same job
Rental/Housing history for 12 months required Rental/Housing history for 12 months required if credit score 619 or less (cancelled checks); if if credit score 619 or less (cancelled checks); if 620 or higher, not required620 or higher, not required
OTHER CRITERIAOTHER CRITERIA Do not own a dwelling currently Do not own a dwelling currently
Lack sufficient resources to secure Lack sufficient resources to secure conventional creditconventional credit
US Citizen, Permanent Resident, Resident US Citizen, Permanent Resident, Resident Alien, or Qualified AlienAlien, or Qualified Alien
Have legal capacity to enter contractHave legal capacity to enter contract
Primary Residences OnlyPrimary Residences Only
PROPERTY ELIGIBLITYPROPERTY ELIGIBLITY Must have access from a street, road Must have access from a street, road
or drivewayor driveway
Site value less than or equal to 30% of Site value less than or equal to 30% of
total valuetotal value
Leasehold estates (where applicable)Leasehold estates (where applicable)
OTHER PROPERTY OTHER PROPERTY REQUIREMENTSREQUIREMENTS
If on a well & septic, must be If on a well & septic, must be
tested and meet county tested and meet county
requirementsrequirements Pest inspection required – Pest inspection required –
deficiencies must be deficiencies must be
correctedcorrected Escrow for repairs under Escrow for repairs under
certain limited circumstances certain limited circumstances
and will be 150% of costand will be 150% of cost
New construction – New construction –
must have warrantymust have warranty
FUNDS AVAILABLEFUNDS AVAILABLE RD has annual amount of funds RD has annual amount of funds
appropriated by Congressappropriated by Congress
Funds must be reserved by the Funds must be reserved by the lender but can’t be until there lender but can’t be until there is a fully-executed sales is a fully-executed sales contractcontract
Reservation is valid for 60 daysReservation is valid for 60 days
Have been known to run out Have been known to run out before end of fiscal yearbefore end of fiscal year
QUESTIONQUESTIONS?S?