By Aideyan Omoregbee
Fico 620 Require
Part II
USDA 100% LOANS REQUIREMENTS
1. Loans must be from lending institutions that have been approved by RHS.
2. Be a 30-year terms and fixed rates at present market interest rates.
3. Loans may be for up to 100% of the market value or the purchase price, whichever is less.
4. The maximum loan amount is based on the homeowner or household (adjusted) income.
5. Loans may include closing costs, legal fees, title services, escrow account setup fees, prepaid items fees, etc. as long as the appraised value is higher than the sales price.
6. RHS charges the lender a one-time guarantee fee of 2 percent of the loan amount which the lender may decide to pass on to the borrower.
7. No private mortgage insurance is required and Fannie Mae and Ginnie Mae accept the loan on the secondary market.
8. RHS guarantees the first 35% of the loan at 100% and the remaining 65% at 85 percent of loss respectively. The maximum loss payable by RHS cannot exceed 90% percent of the original loan amount.
Loans are for 30 years. The promissory note interest rate is set by the lender. There are no required down payments. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.
Loans are for up to 33 years (38 for those with incomes below 60 percent of AMI and who cannot afford 33-year terms). The term is 30 years for manufactured homes. The promissory note interest rate is set by HCFP based on the Government cost of money at time of approval. However, that interest rate is modified by payment assistance subsidy.
STANDARDS:
Under Section 502 program, housing must be modest in size, design, and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features. There are no restrictions on size or design. Typical amenities, except in-ground swimming pools, are allowed.
Under Section 502 program, housing must be modest in size, design, and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features. There are no restrictions on size or design. Typical amenities, except in-ground swimming pools, are allowed.
The house (residence) constructed, purchased, or rehabilitated to be purchased with the guaranteed loan must conform to the voluntary national model building code adopted by the state and HCFP thermal and site standards CABO Model Energy Code and to the structure, facility, and termite standards established by the U.S. Department of Housing and Urban Development.
Manufactured homes must be new and permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.
Approval
Interested, please contact a mortgage client advisor at Tricont Mortgage (803) 317-2500. You can also visit our low rates warehouse page @ www.tricontmortgage.com or email us @ aomoregbee@tricontmortgage.com to complete an application.
NOTE: Approximately 30% of Guaranteed 502 loans are made to families with incomes below 80 percent of AMI... A decision on your application should come within 30 days of receipt of your file at the Rural Development office. Rest assured! Your new home may be right in front of you
For more information on different mortgage loan types, purchases, refinances, blog posts, please visit us @ Tricont Mortgage www.tricontmortgage.com, Tricont Buzz www.tricontbuzz.com, Tricont Post www.tricont.posterous.com Tricont Blog www.tricontblog.com and Tricont Mortgage Blog www.tricontmortgage.blogspot.com before closing on your purchase or refinance mortgage loan.
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Part 3 of 3
DIFFERENCES BETWEEN THE SECTION 502 (USDA) GUARANTEED AND DIRECT LOAN PROGRAMS
To follow soon…..Thank you
