USDA Rural Development Guaranteed Housing loan program.
KEY PROGRAM FEATURES of USDA Rural Development Guaranteed Housing Loan Program:
• No Down Payment Required.
• No Minimum Cash Contribution Required from Borrower.
• No Monthly Mortgage Insurance…just 2% Guarantee Fee for Purchase
• No Cash Reserve Requirement.
• No Stated Maximum Loan Amount; maximum loan based on repayment ability.
• Qualifying ratios of 29%/41%. Ratios may be exceeded to accommodate qualifying borrowers if compensating factors exist.
• Ratios can be exceeded up to 2% on energy efficient NEW and EXISTING homes meeting requirements of the 2000 International Energy Conservation Code.
• 2/1 Temporary Interest Rate Buydowns Allowed
• Loan up to 102%* of appraised value allowed…not the lesser of Sale Price or Appraisal. Difference of contract and appraised value can be used to finance closing costs, prepaids and required repairs. In addition, the guarantee fee paid by borrower can be added above the appraised value.
• Eligible Repairs/Rehabilitation can added to loan amount and completed after closing with the set-up of a repair escrow account.
• No First Time Homebuyer Requirement.
• New and Existing Singe Family One Unit Homes OK.
• Liberal Acreage Allowance.
• Fully Amortized 30-year Fixed Rate Loan.
• No Prepayment Penalty.
• No Seller Contribution Limit.**
• No Limitation on Source of Funds for Closing Costs. No seasoning requirement.
• 100% Gifted Closing Cost or Down Payment/Closing Cost Assistance is permitted.
• No limit on CLTV when soft second financing such as SHIPP or HOME is used for closing costs and prepaids.
• Non-traditional credit may substitute for lack of traditional credit history.
• Streamline documentation available for applicants with a 620 credit score or higher. Borrowers with a 620 mid-score or higher get an automatic "Credit Waiver" from RD and borrower does not need to explain derogatory credit and no rental verification is required. ***
• No minimum credit score required however extraordinary compensating factors must be present to warrant loan approval for applicants with FICO scores of 580 and below.
*Appraisal may be exceeded by amount of Guarantee Fee paid by the borrower.
**Some lenders have a 6% seller contribution as an internal policy. RD requires fees charged to borrower to be reasonable and customary. In addition, all fees and charges are and subject to State, Federal and lender requirements.
*** Exception: Any applicant with delinquent Federal debts, regardless of credit risk score and any applicant with an unsatisfactory payment history on a previous Rural Development loan, regardless of credit risk score. Subject also to lender approval.
For general information purposes only. Loan approval subject to Lender underwriting guidelines and RD regulations 1980-D and applicable ANs.
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