1. Single Family Housing Programs During today’s presentation I will look at the following housing programs: look at the following housing programs: Section 502 Direct Loan ProgramSection 502 Direct Loan Program Section 504 Housing Repair Loan and Grant ProgramSection 504 Housing Repair Loan and Grant Program

2. New Mexico State Office Terry Brunner State Director Art Garcia Housing & Community Program Director

3. Section 502 Direct Loans Purpose: To provide home-ownership opportunities to rural families by providing 100% financing for low and very low income households. 502 loans may be used to buy, build, improve, or repair rural homes.

4. Section 502 Direct Loans Eligibility: Applicants must agree to personally occupy the dwelling. Must be unable to obtain sufficient credit from another lending source at reasonable rates and terms. Applicants must either be US Citizens or provide acceptable evidence of eligible immigration status.

5. Section 502 Direct Loans Eligibility: Applicants must have a Steady & Dependable income. Demonstrate repayment ability. (Ratios) Demonstrate a credit history that indicates ability and willingness to repay a loan. Meet Agency requirements for asset limitations.

6. Repayment Ability Repayment ratios for a Section 502 Loan Repayment ratios for a Section 502 Loan: 29/41% for Very Low Income Applicants 33/41% for Low Income Applicants PITI= Principal, Interest, Taxes, Insurance TD = Total Debt

7. Payment Assistance The Agency uses Payment Assistance to enhance an applicant’s repayment ability for a Section 502 Loan. The amount of Payment Assistance granted is the difference between the installment at the note rate and the amount the applicant must pay based upon income.

8. Section 502 Direct Loans Loan Terms: The standard term for a 502 loan is 33 years. Loans can be written for 38 years to applicants with incomes below 60 percent of AMI who cannot afford the standard 33-year term. Manufactured home loans are written for 30 years.

9. Section 502 Direct Loans Rates: Interest rate is set by RD, currently the interest rate is 3.750% Interest rate can be modified by payment assistance subsidy for eligible applicants.

10. Section 502 Direct Loans Dwelling Standards: Dwelling must be located in a “Rural” area. Housing must be modest in size, design, and cost. (Loan limits apply by county) Reviewed annually. Houses must meet the building code adopted by the state. Site standards apply. (Thermal Standards no longer apply) Properties with in-ground pools are not eligible.

11. SECTION 504 REPAIR LOANS & GRANTS

12. Section 504 Repair Loans and Grants Purpose: The 504 Repair program provides loans and grants to very low-income homeowners to repair, improve or modernize their dwellings or to remove health and safety hazards.

13. Section 504 Loans & Grants Section 504 Loans may be used to make general repairs to improve or modernize the home. Section 504 Grants may be used only for repairs and improvements that will remove health and safety hazards OR repair or remodel dwellings to make them accessible and useable for household members with disabilities

14. Section 504 Repair Loans Terms: Loan amounts up to $20,000 are available. Maximum loan term is 20 years. Interest Rate is fixed at 1%. Promissory note only up to $7,500. Mortgage required for loans over $7,500.

15. Section 504 Repair Loans Eligibility: Adjusted Household Income may not exceed the applicable very-low income limit. (Below 50 percent of the area median income). Applicants must have a reliable income source sufficient to repay a loan. Form RD 1944-3, Budget and/or Financial Statement is completed with the applicant to determine amount the applicant is able to repay.

16. Section 504 Repair Loans Eligibility: Loan applicants must have a credit history that indicates a reasonable ability and willingness to meet debt obligations. Applicant must be unable to obtain conventional credit at reasonable rates & terms.

17. Section 504 Repair Grants Eligibility: Grants are only available to homeowners who are 62 years of age or older and are unable to show repayment for a Section 504 loan. Lifetime Assistance for Grants is $7,500.

18. Section 504 Repair Loans and Grants Terms: A loan/grant combination may be made if the applicant cannot repay the entire amount through a loan. Loans and Grants can be combined for up to $27,500 in assistance.

19. Section 504 Repair Loans and Grants Standards: Major health and safety hazards must be corrected. All work performed must meet local codes and standards.

20. Our website for Property Eligibility and Income Eligibility calculation is available to everyone!! Please visit: http://www.nm.egov.usda.gov Just follow the links under EligibilityInformation for Housing Loans

21. For more information about Rural Housing Service programs, contact the local Rural Development Office in your area or visit our website at: www.rurdev.usda.gov/nm The US Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, sex, religion, age, disability, political beliefs, sexual orientation, or marital of family status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA’s TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of discrimination, write: USDA, Director, Office of Civil Rights, Room 326-W, Whitten Building, 14 th and Independence Avenue, SW, Washington, DC 20250-9410 or call (202) 720-5964 (voice and TDD). USDA is an equal opportunity provider and employer. Rural Development