Presentation on theme: "USDA/RURAL HOUSING Presented by Terrace Mortgage."— Presentation transcript:
USDA/RURAL HOUSING Presented by Terrace Mortgage
Program Highlights 102% financing based on appraised value Terrace Mortgage requires a minimum score of 620 (no exceptions) Refinance option rate reduction only, no cash back, reduced guarantee fee of.5% only available on EXISTING GRH loans No monthly M/I, one time guarantee fee of 2.00% Any excess appraised value over the sales price can be used towards closing costs or pre paid items No payment reserve requirements No need to be FHA approved to submit these loans No down payment Terrace has a minimum loan amount of $50, Year Fixed Best Rate, primary residence ONLY First time homebuyer course may be required and requested by the RD office on a case by case basis. This course is Free and is available online at (States that require FTHB class: FL, GA, MN, SC, TX, WA) No maximum seller concessions, if greater than 6%, comment from the appraiser is required 100% gifting is permitted. Donor MUST be a disinterested third party. Manual underwriting only or GUS approval, no need to run AUS
Income and Ratios 29/41- for homes built before January Exceptions are only with compensating factors and RD concurrence. 31/43 is accepted for homes built after January 2001 (TMC WILL NOT EXCEED DTI OF 50%, NO EXCEPTIONS) Non occupant co borrowers are not permitted All installment debts that have more than 6 months repayment remaining( this includes ANY deferred student loans regardless of how long the deferment period is) are to be included in the DTI ratios Primary income must have no less than a two year history Self employed must have two years of 1040s and P & L Alimony/child support must have a 12 month history with proof of 3 years continuance Part time, over time & bonuses must have a 12 month or more history Disability benefits may be used with a benefit letter AND proof of 3 years continuance and can be grossed up 125% SSI benefits may be used with an Awards letter OR 2 months bank statements. Need proof of 3 years continuance and can be grossed up 125% Salary increases with 60 days of the first payment due date are acceptable Maximum income can be verified by using the RD Moderate Income Limits for the specific area of the property by utilizing For resident (s) under 18 years of age, disabled and/or full time student (s) there is a deduction of $480 for each member of the family residing in the household, when checking for income eligibility click on the ? beside each entry for explanations and requirements of these deductions
Income For a Family of Four
CREDIT Terrace Mortgage requires a minimum FICO of 620. Credit reports can not be more that 60 days old CAIVRS must be checked/pulled (if your company is not FHA approved then the UW will pull CAIVRS for you) **There can be 1 x 30 in the last 12 months with explanations. **Chapter 7 & 13 must be discharged for 3 years. Foreclosures must be completed 3 years ago **Accounts/trade lines CAN NOT have been placed in collections within the past 12 months and charged off accounts within the past 36 months (usually from the DLA date) **Judgments MUST be paid off for at least 12 months. Previous housing payment is not required Non traditional credit is acceptable ONLY if there is NO other credit available (not to offset any closed accounts, derogatory or collections/charge offs no matter how old they are) minimum of three non traditional trade lines for at least 12 months RMCR or Tri Bureau merged is acceptable (TMC will repull if the credit report is from anyone other than CREDCO or EQUIFAX and any affiliates of EQUIFAX) ALL applicants receiving income that will be living in the property MUST be included in the income eligibility. All applicants that will be a party to the Note for the loan, must meet all eligibility requirements First Time Homebuyer education is on a case by case basis or when required by RD ** Exceptions may be granted due to the borrower (s) FICO of 620 or higher
Why Does TMC Have a Minimum FICO of 620 ???
Debt Ratio Waivers (not over 50%)
Permanent Resident Aliens
Deferred Student Loans
Ineligible Properties Projects that are NOT eligible: Non-typical homes for the area Manufactured/Mobile and Modular homes Condominium hotels Timeshares Investment or second home properties Houseboat Projects Duplex: Multi dwelling units where the owner is permitted to hold title to more than dwelling by a single deed
Not for Farm Acreage
What About Outbuildings ????
Property Requirements Property must be located in a RD eligible area (you can either check property eligibility via map or by actual address) Borrowers must not have any other financed properties Primary residence only Single family or RD eligible condo/PUD (town homes are included as long as they are PUDs) Terrace Mortgage does not permit Manufactured/Mobile homes Well/septic inspections are 100% required (septic inspection may be completed by an FHA roster appraiser, well test must be completed by a state certified lab) All outstanding repairs (structural and/or repairs that affect livability) must be completed prior to closing, Terrace Mortgage does not allow title/escrow hold backs for repairs Homes must be certified and commented on the appraisal as meeting HUD handbook guidelines & Appraisers must be on the approved FHA Roster/Appraiser list
What about Pools ???
Pool and Appraisals
The WDO is required only when the lender asks for it or appraisal notes past or current infestation, or if required by county or state.
What If ????
Income Eligibility How To
Income Eligibility Calculator
Income Eligibility Determination Summary
Check Property Eligibility
The Map For Your Specific County and/or Area
Property Eligibility Map
Counties of your State
Rules of the 2% Guarantee Fee
Calculations of the 2% Guarantee Fee
Funds for Closing All closing costs may be financed, except discount points unless borrower is below the RD low income limit, then discount points may be finance County or State Assistance funds are acceptable 100% gifting is acceptable from disinterested third party No minimum cash contribution from borrower (s) Borrowing of unsecured funds allowed with a middle FICO score of 660 or higher If the appraised value exceeds the sales price, the instant equity can be used for closing costs, pre paid items and/or the one time guaranty fee of 2.00% (the one time fee of 2% can be paid upfront in full by the borrower(s) own funds or can be gifted) No MI - only a one time guarantee fee of 2.00% that is or can be financed above the appraised value