Guaranteed Loan Program

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Guaranteed Loan Program - Single Family Housing-
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Hello!
Linda Rhoades Single Family Housing
Specialist USDA, Rural Development 210 Walnut
Street 873 Federal Building Des Moines, Iowa
50309 515-284-4723 Phone [phone] Fax
linda.rhoades_at_ia.usda.gov mary.juergens_at_ia.usda.g
ov heather.honkomp_at_ia.usda.gov
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Agenda

• USDA, Rural Development
• Single Family Housing Guaranteed Loan Program
• Benefits
• Applicant Eligibility
• Property Eligibility
• The Process
• Resources Available

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Single Family Housing Guaranteed Loan Program
(SFHGLP)

• Loan made, held, and/or serviced by an approved
  SFHGLP lender
• 90 Guarantee by USDA

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Home Buyer Benefits

• 100 LTV SFHGLP Fee
• No Mortgage Insurance
• 30 Year Fixed Rate
• Partner with other Funding Sources
• No Loan Limit
• Fees Repairs may be Financed
• Unlimited Gifts or Seller Contributions
• No Reserves Required

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Lender Benefits

• 100 LTV SFHGLP Fee
• Expand Market Share
• Lender Profitability
• Guaranteed by Government
• Lender Underwrites Loan
• Quality Customer Service

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Tools Available Online

• Iowa SFHGLP Handbook http//www.rurdev.usda.gov/ia
  /rhsg.html
• Administrative Notices (ANs)
• Newsletters

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www.rurdev.usda.gov/ia/rhsguar.html
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Rate and Term

• 30-Year Fixed
• Interest Rate Set by Approved Lender
• Capped by RD
• One-Time GRH Fee
• 2.00 Purchase Loans
• .5 Refinance Loans

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Loan Purposes

• Purchase New
• Stick or Modular
• Manufactured
• Purchase Existing
• Stick or Modular

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More Loan Purposes

• Repairs
• Refinance
• RD Direct
• Guaranteed Loan
• Typical Loan Closing Costs

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Prohibited Purposes

• Construction Draws
• Furniture Personal Property
• Existing Manufactured Home
• Income Producing Property
• Non-Essential Buildings Land
• In-Ground Swimming Pool

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Income

• Household adjusted annual income may not exceed
  the MODERATE INCOME limit.
• Limits based on family size county where the
  property is located
• Income Property Eligibility web site at
  http//eligibility.sc.egov.usda.gov

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www.rurdev.usda.gov
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http//eligibility.sc.egv.usda.gov/eligibility/
o
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Income Verification

• Verification of Employment
• Most Recent Pay Stub

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Adjusted Annual Income

• Income of all Adult Household Members
• Gross income
• OT, commissions, bonuses, etc.
• Net self-employment income
• SS, child support, unemployment, etc.

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Adjusted Annual Income

• Adjustments (Annual Basis)
• 480 per minor or full-time student
• Verified child care expenses
• 400 where borrower or co-borrower is elderly or
  disabled

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Repayment Income

• Adequate Dependable Income
• Repayment Income ? Adjusted Annual Income
• OT, commission, self-employment, bonus income
  should have a 24 mo. history
• Earned Income Credit may be added
• Non-taxable income may be grossed-up

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Repayment Ability

• PITI 29.0
• TD 41.0
• Include all debts 6 months
• May exceed Ratio Limits with documented
  compensating factors such as
• Zero or little payment shock
• 620 Credit score
• 2 years on the job
• And More

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Credit Verification

• Verification
• Residential Mortgage Credit Report (RMCR)
• Tri-Merged Credit Report
• Credit Alert Interactive Voice Response System
  (CAIVRS)
• Rent History 12 months
• Required only if FICO lt 620

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Credit History

• No Credit Lines ? Bad Credit
• Scores NO MINIMUM
• 620 no further review of credit
• lt 620 review per Rural Development Regulations
• Credit Waiver from Lenders Underwriter
• Temporary circumstances,
• Beyond applicants control,
• and Circumstances removed
• or
• Justifiable Dispute

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Risk Layering

• The Big Picture
• LENDER underwrites
• NO ADDITIONAL Risk Layering if Payment Shock
  exceeds 100
• (unless there are multiple compensating factors)

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Other Criteria

• Do not own a dwelling
• Insufficient resources to secure conventional
  credit without the Guarantee
• U.S. Citizen or Permanent Resident or Qualified
  Alien
• Legal Capacity
• Primary Residence

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Site Eligibility

• Must be in Rural Area
• http//eligibility.sc.egov.usda.gov/eligibility
• Access from a Street, Road or Driveway
• Environmental Review by Agency Staff
• Site Outbuilding Values 30 of total value

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http//eligibility.sc.egov.usda.gov/eligibility/
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Flood Mudslide

• Existing Property
• must have flood insurance
• must be able to afford per ratios
• New Construction
• not eligible in flood area in Iowa

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Appraisal

• Less Than 6 Months Old
• As Is or As Improved
• Properly Licensed or Certified Appraiser
• Reviewed by Rural Development

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Inspections

• Lender determines who is qualified to inspect
  properties.
• Home Inspection
• - or -
• Documentation per HUD HB 4905.1 and 4150.2

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Existing Property Inspections

• Certify property is structurally sound,
  functionally adequate, in a state of good
  repair
• Meet HUD
• Handbooks
• 4905.1 and 4150.2

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Repairs

• May be included in the Loan
• Completed prior to issuance of the Loan Note
  Guarantee
• Escrow for LNG
• permitted when
• weather prevents
• completion

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New Construction Inspections

• Three Required Inspections with 1 Year Builders
  Warranty
• Footing, Rough-In, Final
• OR
• Final Inspection with 10 year warranty
• OR
• Certificate of Occupancy with a 1 year Builders
  Warranty

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New Construction

• Stick Modular
• Built in accordance with approved building
  codes-varies by state
• Certification official must meet Agency approval
• Conform to Rural Development thermal codes

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New Construction

• Manufactured
• New Units ONLY
• Agency Approved Dealer Contractors
• Includes unit related site development work
• Must meet Agency thermal standards based on where
  the unit will be located
• Unit must be placed on a permanent foundation

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Sum It All Up
atios ncome nterest Rate redit ouse

• R
• I
• I
• C
• H

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The Process
Lender accepts application.
Lender pre-qualifies application.
Lender reserves SFHGLP funds with RD.
Lender processes application.
Lender submits complete application to RD.
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The Process
Rural Development issues Conditional Commitment
within 24 hours.
Lender closes loan.
Lender submits closing package to Rural
Development.
Rural Development issues Loan Note Guarantee to
Lender.
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Iowa Offices
See list of offices contacts.
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Reservation of Funds

• Fax RD Form 1980-86, Request for Reservation of
  Funds to the RD office according to property
  location.
• Reservation valid for 60 days

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What is in a Package?
See Exhibits H and H-1 of Iowas SFHGLP Handbook
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Conditional Commitment

• Issued by RD within 24 Hours of Complete Package
• DO NOT CLOSE without a CC

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Post-Closing

• If repairs were not escrowed, repairs must be
  completed prior to issuance of the Guarantee.
• Submission Checklist Exhibit I
• 1980-19, Loan Closing Report
• Guarantee Fee
• Lender Certification
• Loan Note Guarantee issued.

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Resource Websites

• Eligibility Website http//eligibility.sc.egov.usd
  a.gov/
• USDA LINC https//usdalinc.sc.egov.usda.gov/
• National RD Website www.rurdev.usda.gov/
• RD Regulations www.rurdev.usda.gov/regs/

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More Resource Websites

• Administrative Notices http//www.rurdev.usda.gov
  /regs/an_list.html
• Fannie Mae Rates
• http//www.efanniemae.com/singlefamily/reference
  tools/net_yields/db_rate_chart.jhtml
• Credit Alert Interactive Voice Response System
  (CAIVRS) [phone]
• http//www.hud.gov/offices/hsg/sfh/sys/caivrs/
  caivrs/cfm

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United States Department of Agriculture
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Questions?
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June is Homeownership Month!

• Each year we recognize June as Homeownership
  Month!
• Thank you for helping us celebrate!!

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Thank You