RURAL DEVELOPMENT (RD)
GUARANTEED RURAL HOUSING PRODUCT MATRIX
****TO ENSURE USDA ELIGIBILITY FOR PROPERTY & INCOME~CHECK
THE FOLLOWING SITE:
All income eligibility must be checked at:
http://eligibility.sc.egov.usda.gov
All properties must be checked for eligibility at:
http://eligibility.sc.egov.usda.gov
PROGRAM BENEFITS
103.50% financing based on appraised value purchases, 101.00% on Refi’s
Term
30-year fixed Only, No 15 year fixed or ARMs available
Refinance Option
***Must be USDA loan now***
Yes – Rate reduction only – no cash back – Reduced Guarantee Fee of 1.00%
Only existing GRH loans are eligible for refinance
No monthly mortgage insurance. One-time guarantee fee of 3.50% Purchases 1.00% Refi’s
Payment reserves
No payment reserve requirements. **May be required case by case**
Down payment/Grants
No downpayment required. Grants allowed, please contact us for approval in advance
First-time homebuyer
No First-time homebuyer requirement
Seller concessions
No maximum. If greater than 6%, comment from the appraiser required
Gifts
Grants
Leased Land
100% gifting permitted. Donor required to be family member
City, County, State, or Federal Grants OK. Must be approved by CNB prior to loan submission
Leased Land OK if lease >33 years and approved in advance by CNB
INCOME AND RATIOS
Ratios
29/41 – exceptions encouraged with compensating factors and RD concurrence
(Comp factors: Credit, 0% Payment Shock, Disposable Income) Exception max is 49%
`Non-occupant Co-borrower
Non-occupant co-borrowers not permitted. All borrowers must live in residence.
Installment debt
Include all installment debt greater than 6 months
Primary income
Two-year history
Self-employment
Two-years 1040s and YTD P&L~***P & L’s MUST BE PREPARED & SIGNED BY LICENSED
CPA &/OR LICENSED TAX PREPARER***
Alimony/child support
12-month history, with proof of 3 years continuance
Part-time, Over-time & Bonus, Com.
24-month history
Disability benefits
Benefits letter , 3 years continuance and gross up 115% &/OR 125% ~** SEE TAX BRACKET
CHART TO DETERMINE**
SSI benefits
Awards letter or 2 months bank stmts, 3 years continuance and gross up 115% & OR 125% ~***SEE
TAX BRACKET TO DETERMINE***
Salary increases
Salary increases within 30 days of the first payment due date ***on a case by case basis***
Maximum income
Use RD Moderate Income Limits
http://eligibility.sc.egov.usda.gov
CREDIT
Credit score/
NO SCORE
620 Minimum Score for all borrowers.
TRUE NO SCORE~ A BORROWER WITH ONLY 1 CREDIT SCORE OR NO CREDIT SCORES. TO BE
ELIGIBLE FOR A TRUE NO SCORE PROGRAM THERE CAN BE NO DEROGATORY CREDIT PAST
OR PRESENT, THE BORROWER MUST HAVE 3 ALT TRADES, 4 ALT TRADES IF NO RENT
INFORMATION IS AVAILABLE. IF VERIFIABLE 12 MONTH RENTAL RATING THEN 2 ALT TRADES
& RENT HISTORY. THE RENTAL RATEING MUST COME FROM A MANAGEMENT COMPANY OR
12MONTHS CANCELLED CHECKS. ALL ALT TRADES MUST BE MONTHLY PAID IN NATURE IE
UTILITES, FOR A 12 MONTH PERIOD AND PROVIDED ON AN ALT CREDIT REPORT***
Credit Bureau Trades
Late payments
We require at least 2 credit scores. Minimum middle score is 620. We must have 3 seasoned trades
(12 mo or more). If there are not 3 seasoned we will required 3 alternative trades of which one must
be a verifiable 12 month rental history. The 12 month rental history must be verified through either a
management company or 12 months canceled checks. The other 2 trades must be monthly pays and
rate for 12 months. These 2 alt trades should be provided on an alternative credit report. *
NOTE
* Alt
trades can be requested at underwriter discretion.
0 X 30 permitted in last 24 months with explanations – Exceptions may be granted if your borrowers
have 620 or greater middle credit scores.
Bankruptcy/Foreclosure/Short Sales
Chapter 7 and 13 must be discharged for 3 years – Foreclosures must be completed 3 years ago.
Credit must be reestablished and no derogatory credit since BK or F.
Collections
Accounts cannot have been placed in collection status within the last 12-months – Exceptions may
be granted if your borrowers have 640 or greater middle credit scores. Large balances and/or credit
repossessions balances in most cases will be required to be paid off.
Judgments
Must be paid off for at least 12 months – Exceptions may be granted if your borrowers have 640 or
greater middle credit scores.
CURRENT RENTAL PAYMENT
MUST BE LISTED ON 1003 IF APPLICABLE
Scores>640 possibly waived by CNB underwriting
Scores>620 possibly waived by CNB underwriting with additional nontraditional credit trades
No Score Loans must have rent verification without exception
Non-traditional credit
Non-Traditional Credit May be required in the borrower(s) have limited trades and no derogatory
credit history. Alt trades must be a VOR (management company or cancelled checks, no private party
VOR ), electric, gas, phone, etc. 3 Trades with 24 month history.
Credit report
RMCR or Tri-Bureau merged
Homebuyer education
Case by case basis or No Score borrowers & First Time homebuyers
FUNDS FOR CLOSING
Closing costs
All closing costs may be financed, except discount points unless borrower is
below the RD low income limit, then discount points may be financed
Seller concessions
All closing costs and prepaids may be paid by seller concessions. Max 6%
Gifting
100% gifting acceptable from disinterested third party **Documentation
Required: Acceptable gift letter, donor’s ability to gift, Evidence of receipt &
deposit of gift, & updated bank statements or History printout to reflect balance
after gift. **Note** History printout must identify the borrower, the account
number, and must be stamped, signed and dated by the teller***
Cash contribution
No minimum cash contribution from borrowers
Earnest Money Deposit
Copy of cancelled check & Evidence of borrower’s own funds
PROPERTY REQUIREMENTS-FNMA 1004MC by FHA Approved Appraiser.
All USDA Appraisals are ordered on CNB National Lending, LLC’s website: www.cnbnationallending.com
Eligible areas
Property must be located in a RD eligible area
http://kentuckyusdaloan.wordpress.com/2011/09/02/kentucky-usda-mortgage/
Other Real Estate Owned
Occupancy/Size of Home
Primary residence only and Minimum Square footage 800
Property Type
Single family or RD eligible condo/PUD. 1 unit only.
Manufactured homes
No Manufactured Homes Allowed.
Swimming pools
In-ground swimming pools require an exception from USDA **Note** the
contributory value of the pool must be subtracted out of the appraised value of
the home*** (above ground permitted)
Thermal Certification
Thermal insulation certifications are no longer required!
Home Inspection
Adequacy Certification
USPAP Ethic’s Rule
Homes must be certified as meeting HUD handbook guidelines 4150.2 &
4905.1. This specific verbiage must be added to the appraisal on page 3 of 6
Page 3 is the same page as the cost approach section.
Appraiser’s must comply with the 2010/2011 USPAP Ethics Rule in the
Conduct Section requires that the appraiser, to make the following statement on
page 3 of 6 in the additional comments section above the cost approach section.
Appraiser’s must state the following ~~ Therefore, I am stating that I have not
performed an appraisal service with regard to the subject property in the three
years proceeding this assignment.
Termite inspection
All areas as required by RD &/OR appraisal or purchase contract.
Well/Septic inspections
If property has a well &/Or Septic this is 100% required – Septic inspection
may be completed by FHA roster appraiser. Appraiser to state that he/she has
located septic and it appears to be in working order, free of observable system
failure and it is an acceptable distance from the well & lot line and is in
compliance with HUD OR State code. Well water must be tested by state
certified lab.
Repairs-Must be completed
prior to loan closing as
required
NEW!
Escrow repairs now available. details for USDA Repair Escrows
CFR 226.2(a)(2). All products are subject to credit and property approval. Program terms and conditions are subject to change without notice.
Not all products are available in all states or for all dollar amounts. Other restrictions and limitations apply.
Very great post. I simply stumbled upon your blog and wished to say that I have really loved surfing around your weblog posts. In any case I’ll be subscribing on your rss feed and I am hoping you write again soon!