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PROGRAM BENEFITS
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Financing
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102% financing based on appraised value
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Term
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30-year fixed
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Refinance Option
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Yes – Rate reduction only - no cash back - Reduced Guarantee Fee of .5%
Only existing GRH and Section 502 Direct loans are eligible for refinance
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Mortgage insurance
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No monthly mortgage insurance. One-time guarantee fee of 2.00%
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Payment reserves
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No payment reserve requirements
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Downpayment
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No downpayment
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First-time homebuyer
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No First-time homebuyer requirement
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Seller concessions
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No maximum. If greater than 6%, comment from the appraiser required
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Gifts
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100% gifting permitted. Donor must be disinterested third party.
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INCOME AND RATIOS
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Ratios
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29/41 – exceptions encouraged with compensating factors and RD concurrence
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Non-occupant Co-borrower
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Non-occupant co-borrowers not permitted unless approved by RD
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Installment debt
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Include all installment debt greater than 6 months
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Primary income
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Two-year history
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Self-employment
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Two-years 1040s and P&L
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Alimony/child support
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12-month history, with proof of 3 years continuance
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Part-time, Over-time & Bonus
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12-month history
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Disability benefits
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Benefits letter , 3 years continuance and gross up 125%
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SSI benefits
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Awards letter or 2 months bank stmts, 3 years continuance and gross up 125%
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Salary increases
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Salary increases with 30 days of the first payment due date are acceptable
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Maximum income
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Use RD Moderate Income Limits http://eligibility.sc.egov.usda.gov
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CREDIT
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Credit score
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No minimum credit scores
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Late payments
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1 X 30 permitted in last 12 months with explanations – Exceptions may be granted if your borrowers have 620 or greater middle credit scores
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Bankruptcy/Foreclosure
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Chapter 7 and 13 must be discharged for 3 years – Foreclosures must be completed 3 years ago – Exceptions may be granted if your borrowers have 620 or greater middle credit scores
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Collections
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Accounts cannot have been placed in collection status within the last 12-months – Exceptions may be granted if your borrowers have 620 or greater middle credit scores
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Judgments
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Must be paid off for at least 12 months – Exceptions may be granted if your borrowers have 620 or greater middle credit scores
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Verification of Rent
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If the applicant’s middle credit score is under 620 a VOR is required for the most recent 12 months.
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Previous Housing Payment
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Not required
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Non-traditional credit
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Acceptable if no credit is available and borrower has no derogatory credit history. Alt trades must be VOR (management company or cancelled checks, no private party VOR for zero scores), electric, gas, phone, etc.
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Credit report
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RMCR or Tri-Bureau merged
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Homebuyer education
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Case by case basis or when required by RD
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2/1 TEMPORARY BUYDOWN
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2/1 Temporary buydown
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Available with compensating factors, qualify at start rate.
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