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USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

Dec 27, 2015

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Page 1: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.
Page 2: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

USDA RURAL DEVELOPMEN

T

Page 3: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

WHAT IS RURAL WHAT IS RURAL DEVELOMENT?DEVELOMENT?

Census-basedCensus-based

US Department of AgricultureUS Department of Agriculture

Guaranteed against loss by USDAGuaranteed against loss by USDA

Pays lender if borrower defaultsPays lender if borrower defaults

Page 4: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

WHO CAN DO USDA WHO CAN DO USDA LOANS?LOANS?

Approved lender with HUD, VA, Approved lender with HUD, VA,

Fannie Mae or Freddie MacFannie Mae or Freddie Mac

State Housing Agency State Housing Agency

Farm Credit ServiceFarm Credit Service

Page 5: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

IT’S THE IT’S THE GOVERNMENT!GOVERNMENT!

Pays for itself – doesn’t use taxpayer Pays for itself – doesn’t use taxpayer

moneymoney

Funded through the 2% Funding Fee Funded through the 2% Funding Fee

(which can be financed into the (which can be financed into the

loan!)loan!)

Page 6: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

LOAN PURPOSELOAN PURPOSE Purchase new Purchase new

constructionconstruction

Purchase existing homePurchase existing home

Refinance (only if Refinance (only if currently have a direct currently have a direct Rural-Development Rural-Development Loan)Loan)

Purchase Mobile Home Purchase Mobile Home (very limited; difficult)(very limited; difficult)

Page 7: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

REASONS TO NOT USE REASONS TO NOT USE RURAL DEVELOPMENT FOR A RURAL DEVELOPMENT FOR A

BUYERBUYER

Geographical LimitationsGeographical Limitations Maximum Income limitationsMaximum Income limitations Can’t buy house with in-Can’t buy house with in-

ground pool (can try for ground pool (can try for exception to this)exception to this)

Primary Home Only Primary Home Only

Page 8: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

INCOME INCOME QUALIFICATIONSQUALIFICATIONS

Household adjusted annual income Household adjusted annual income cap uses ALL occupants whether on cap uses ALL occupants whether on the loan or not, that are 18 and overthe loan or not, that are 18 and over

Counts gross income, overtime, Counts gross income, overtime, commission, bonuses, net self-commission, bonuses, net self-employment income, Social employment income, Social Security, Child Support, Security, Child Support, unemployment, etc.unemployment, etc.

Based on family size & county Based on family size & county where property is locatedwhere property is located

http://eligibility.sc.egov.ushttp://eligibility.sc.egov.usda.govda.gov

Page 9: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

ADJUSTMENTS TO ADJUSTMENTS TO INCOMEINCOME

$480/Year per minor or full-$480/Year per minor or full-time student time student

Verified child care Verified child care expensesexpenses

$400/Year if borrower or $400/Year if borrower or co-borrower is over 62 or co-borrower is over 62 or disableddisabled

Page 10: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

CountiCountieses

1- 1- persopersonn

2- 2- persopersonn

3- 3- perspersonon

4- 4- perspersonon

5- 5- perspersonon

6- 6- perspersonon

7- 7- perspersonon

8- 8- persopersonn

All Florida & All Florida & Virgin Island Virgin Island Counties Counties EXCEPT those EXCEPT those listed below*listed below*

49,549,55050

56,656,60000

63,763,70000

70,770,75050

76,476,40000

82,082,05050

87,787,75050

93,493,40000

Clay, Duval, Clay, Duval, Nassau and Nassau and

St. JohnsSt. Johns

51,451,40000

58,758,75050

66,166,10000

73,473,45050

79,379,35050

85,285,20000

91,191,10000

96,996,95050

CollierCollier 56,256,20000

64,264,25050

72,272,25050

80,380,30000

86,786,70000

93,193,15050

99,599,55050

106,106,000000

Palm BeachPalm Beach 55,755,70000

63,663,65050

71,671,60000

79,979,95050

85,985,90000

92,392,30000

98,698,65050

105,105,000000

Gadsen, Gadsen, Jefferson and Jefferson and LeonLeon

50,050,00000

57,157,15050

64,364,30000

71,471,45050

77,177,15050

82,982,90000

88,688,60000

94,394,30000

OkaloosaOkaloosa 50,850,85050

58,158,10000

65,465,40000

72,672,65050

78,478,45050

84,284,25050

90,190,10000

95,995,90000

* Broward, Pinellas and Monroe are NOT eligible

Page 11: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

GEOGRAPHICAL GEOGRAPHICAL QUALIFICATIONSQUALIFICATIONS

ALL of Walton CountyALL of Walton County Destin Destin NicevilleNiceville ValparaisoValparaiso CrestviewCrestview West of Hurlburt in Okaloosa CountyWest of Hurlburt in Okaloosa County ALL of Santa Rosa CountyALL of Santa Rosa County

Page 12: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

GEOGRAPHICAL GEOGRAPHICAL LIMITATIONSLIMITATIONS

FT. WALTON BEACH FT. WALTON BEACH

&&

SHALIMAR SHALIMAR

DO NOTDO NOT

QUALIFYQUALIFY

Page 13: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

BENEFITS TO BUYERSBENEFITS TO BUYERS

Can finance 102% of appraised value, Can finance 102% of appraised value, without getting cash back at closing (can without getting cash back at closing (can get EMD, but no more)get EMD, but no more)

No Monthly Mortgage InsuranceNo Monthly Mortgage Insurance 30-Year fixed rate with very competitive 30-Year fixed rate with very competitive

ratesrates No loan limits (DTI/income limitations)No loan limits (DTI/income limitations) Closing costs can be financedClosing costs can be financed Unlimited gift or seller contributionsUnlimited gift or seller contributions No reserves requiredNo reserves required

Page 14: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

Sales Price: Sales Price: Appraisal: Appraisal: Seller Seller Paying:Paying:EMD:EMD:Closing/PrepClosing/Prepaidsaids2% Funding 2% Funding Fee:Fee:

$100,000$110,000$0 Closing Costs$500$3,000/$2,000$2,000

Can Finance: $107,000 and get $500 EMD back

Page 15: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

Sales Price:Sales Price:Appraisal:Appraisal:Seller Paying:Seller Paying:EMD:EMD:2% Funding 2% Funding Fee:Fee:

$100,000$100,000$105,000$105,000ALL ALL

Closing/Ppds.Closing/Ppds.$500$500$2,000$2,000

Can Finance: $102,000 and get $500 EMD back

Page 16: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

QUALIFYINGQUALIFYING Debt to Income Ratios = 29/41Debt to Income Ratios = 29/41 Debt to Income Ratios = 31/43 Debt to Income Ratios = 31/43

(for homes built after January, 2001)(for homes built after January, 2001) Can go higher on DTI w/compensating factors: Can go higher on DTI w/compensating factors:

660+ Credit Score660+ Credit Score Zero or very little payment shockZero or very little payment shock 2+ years continuous employment at same job2+ years continuous employment at same job

Rental/Housing history for 12 months required Rental/Housing history for 12 months required if credit score 619 or less (cancelled checks); if if credit score 619 or less (cancelled checks); if 620 or higher, not required620 or higher, not required

Page 17: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

OTHER CRITERIAOTHER CRITERIA Do not own a dwelling currently Do not own a dwelling currently

Lack sufficient resources to secure Lack sufficient resources to secure conventional creditconventional credit

US Citizen, Permanent Resident, Resident US Citizen, Permanent Resident, Resident Alien, or Qualified AlienAlien, or Qualified Alien

Have legal capacity to enter contractHave legal capacity to enter contract

Primary Residences OnlyPrimary Residences Only

Page 18: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

PROPERTY ELIGIBLITYPROPERTY ELIGIBLITY Must have access from a street, road Must have access from a street, road

or drivewayor driveway

Site value less than or equal to 30% of Site value less than or equal to 30% of

total valuetotal value

Leasehold estates (where applicable)Leasehold estates (where applicable)

Page 19: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

OTHER PROPERTY OTHER PROPERTY REQUIREMENTSREQUIREMENTS

If on a well & septic, must be If on a well & septic, must be

tested and meet county tested and meet county

requirementsrequirements Pest inspection required – Pest inspection required –

deficiencies must be deficiencies must be

correctedcorrected Escrow for repairs under Escrow for repairs under

certain limited circumstances certain limited circumstances

and will be 150% of costand will be 150% of cost

New construction – New construction –

must have warrantymust have warranty

Page 20: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

FUNDS AVAILABLEFUNDS AVAILABLE RD has annual amount of funds RD has annual amount of funds

appropriated by Congressappropriated by Congress

Funds must be reserved by the Funds must be reserved by the lender but can’t be until there lender but can’t be until there is a fully-executed sales is a fully-executed sales contractcontract

Reservation is valid for 60 daysReservation is valid for 60 days

Have been known to run out Have been known to run out before end of fiscal yearbefore end of fiscal year

Page 21: USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT? Census-based Census-based US Department of Agriculture US Department of Agriculture Guaranteed against.

QUESTIONQUESTIONS?S?