NEW YEAR NEW OPPORTUNTIES! Robert McDonald, Housing Program Director firstname.lastname@example.org 802-828-6015 VT/NH USDA RURAL DEVELOPMENT GUARANTEED LOAN PROGRAM We DON’T inspect meat! (or peanut butter) We DON’T finance farms! This is NOT Rural Development! THIS IS MORE LIKE IT! NO MAXIMUM PURCHASE PRICE More lenders choose 100% Guaranteed financing FIRST! • True 100% program • No maximum purchase price • No monthly mortgage insurance • Expanded qualifying ratios 29/41 and above • No asset limit / No reserve minimum • Generous income limits: ADJUSTMENTS • Not FICO driven: NOT A SUB-PRIME SOLUTION! Emerging Markets/Non Traditional histories, etc. • NOT just for first time homebuyers • Creative financing options to maximize buying power Eligible areas: http://eligibility.sc.egov.usda.gov/eligibility/wecomeAction.do Click here for property eligibility Click here for income limits If you have a complete address including the zip code enter it here Just browsing in a county? Click on “VERMONT” and then click on the county you are interested If you are interested in Washington County… click on it! Washington county is 100% eligible! If you had selected Chittenden county you can see a few cities are ineligible. More Benefits: • Downpayments accepted up to 19% • Gift/Grant funds accepted • Generous income limits Deductions allowed for children, daycare, and more! GENEROUS ―ADJUSTED‖ INCOME LIMITS MOD. INC-GUAR. LOAN Washington County ―Adjusted‖ Income Limits 1 person: $52,750 5 person: $81,400 2 person: $60,300 6 person: $87,400 3 person: $67,800 7 person: $93,450 4 person: $75,350 8 person: $99,450 Search out DEDUCTIONS! Dependents: $480 each • Children 18 yrs. or younger • Disabled household members 18 yrs. or older • Full time students 18 yrs. or older • Care expenses of minor children 12 yrs. or younger that enable the employment of a household member Elderly family: $400 • 62 yrs. of age or older, disabled, or surviving spouse of deceased elderly client • Medical expenses not to exceed 3% of gross income Deductions In Action! • Family of 3 $73,000 Gross $74,000 gross salary - $480 1 child • Moving to - $5200 daycare Washington county, VT $67,320 Waashington county adjusted income THEY limit for 3: $67,800 QUALIFY! REALITY CHECK KIDS ARE EXPENSIVE! • Daycare: $100 - $300 per week • After school care: $75 - $150 per week • Summer months: full time care for all children No tax returns necessary! Please provide receipts or letters from providers stating prices. FIND THE DEDUCTIONS! Qualify more clients! Family of 4 moving to Washington Co.: • 3 yr old: daycare $200 wk x 52= $10,400 • 9 yr old: after school $50 wk x 9 mo. = $1,800 • 2 kids x $480 = $960 $80,960 possible gross salary Guaranteed to compete! $175,000 loan $4,000 annual real estate taxes $600 annual home insurance premium YOU BE THE JUDGE! NO PMI LOANS 8% INTEREST RATE 30 YR. TERM $1572 FREDDIE MAC 100 $1547 FREDDIE MAC HOME POSSIBLE/FANNIE MAE MY COMMUNITY $1518 FLEX 100 $1505 5% CONVENTIONAL ($8,750 + MI) $1493 FHA ($5,250 + UFMIP + MI) $1488 40 YEAR LOAN + MI $1486 FLEX 97 ($5,250 (3%) DOWN + MI $1471 80/20 80%: 6% 30 YEAR LOAN 20%: 7.5% 30 YEAR LOAN $1467 VA 2.15% FEE NO MI $1455 100% RURAL DEVELOPMENT + $1453 2% GUARANTEE FEE NO MI 2% GUARANTEE FEE IS A DEAL! • Roll fee in above appraised value: No out of pocket needed • Cheaper than PMI • Best insurance coverage for the lender (90%) • Least cost to client Guarantee Fee vs. PMI $3,500 guarantee fee vs Freddie 100: 2.08 years HP/My C: 3.39 years 95% LTV: 3.5 years Flex 100: 4.0 years FHA: 1.02 years (time to break even) Average stay of homebuyer: 5-7 years UPDATES! INTERPRETATIONS! CLARIFICATIONS! WHO APPROVES THE LOAN? THE LENDER! Rural Development does not: • Underwrite loans • Issue credit waivers • Inspect properties Credit standards • What are your credit standards? – Explanations acceptable to your standards are given special consideration • You decide if open collections must be paid – Will repayment be impaired? • Credit scores over 620 require no explanations AN 4237: Utilizing Credit Scores • 620 and above qualifies for streamlined documentation (NO VOR’s, No adverse credit explanations) • 619 and below: be careful of too many risk layers (ratios waivers, and adverse credit waivers, and no previous housing history, and etc.) AN 4216: Collection Accounts • UW will determine what is to be paid • Tax liens, judgments, federal debts must be cleared • Adverse credit waiver must be issued on 1008 by UW if collections remain open • UW must document decision THE UNDERWRITER WILL SIGN HERE By signing here you are acknowledging that you did underwrite the file. The borrower(s) will each sign here. FAX OR PHOTOCOPIES OF SIGNATURES ARE NOW ACCEPTED! RD 101: File Flow • Lender interviews applicant • Lender submits to their underwriter • Lender submits approved underwritten file to RD • RD issues conditional commitment in 24-48 hours • Loan closes • Lender submits closing package to RD • RD issues Loan Note Guarantee Building your business with Guaranteed Financing! Be a trusted advisor • $230,000 purchase • 10% downpayment saved • Debts: Car 1: $350/mo.9 months left Car 2: $400/mo. 2 years left Visa: $6,000 Mastercard: $3,000 Old Navy: $500 Fingerhut: $650 Furniture: $2,500 $12,650 credit card debt alone! Which would you choose? 100% Guaranteed 10% Down Conventional $230,000 + Guarantee fee, $230,000 – 10% ($23,000), taxes & insurance taxes & insurance $1,932 $1,893 • Clients retain $23,000 to • Clients are out $23,000 and pay off debt, save, invest, they have over $25,000 in etc. debt • By paying off Car 1 and all • Home Equity Loan? credit cards they would Now they get to PAY to still have $7,350 plus $350 borrow their own money! additional monthly income (If they even have a credit ($4,200 per year) • ALL FOR $39 MORE PER score high enough to MONTH! qualify for the loan) 5% down with RD Put down 5% with RD 80/20 $230,000 – 5% ($11,500) + 80%: $184,000 6.5% Guar.fee, tax, & ins. 20%: $46,000 8.0% $1,852 Plus taxes and insurance $1,967 • Client retains $11,500 for debt reduction, savings, ER • Need a great credit score fund, etc. • 2% FEE IS THE MOST COST • 2nd mtg is tied to HELOC and EFFECTIVE OPTION! prime rate it will go up—may not be a fixed rate • Client has to make two payments Purchase and repair options • Escrow for repairs & get Note Guarantee with no delay • Not just weather related repairs • Homebuyers get to close and move in before repairs are completed • Up to 180 days to submit completion certificate Myth #1: Inspections are too picky; house will never pass…… • HUD Handbook 4150.2 standards (drastically revised 12/2005) • Home Inspection • In a survey of real estate professionals conducted by the American Society of Home Inspectors, 99% of respondents said they always or often make the recommendation that buyers get a home inspection. • RD will alert you IF any repairs are necessary to meet minimum standards. Which repairs are required? • Missing handrails • Cracked window • Dripping faucet • Peeling paint on doorframe/windows • Flat roof on garage: could not inspect • No smoke detectors • No GFI’s in kitchen/bathrooms NONE OF THOSE REQUIRE REPAIR! Myth #2: RD loans have recapture, I don’t recommend them! • Guaranteed loans have NO RECAPTURE!! Clients make full payments to their lender. Myth #3: RD loans take too long to close • THIS IS YOUR LOAN! How fast can you complete: * appraisal * underwriting • RD turns around complete underwritten files in 24-48 hours Myth #4: Real estate in my area is too high priced for RD loans NO MAXIMUM PURCHASE PRICE! Expanded Qualifying Ratios + Creative Financing Options BUYERS QUALIFY FOR A HOME THEY LOVE! Myth #5: RD loans are for low income applicants and ―fixer-upper‖ homes • Generous “adjusted” income limits apply • RD encourages newer homes and new construction 100% Guaranteed Rural Development Financing is: • Flexible • Affordable • Profitable • Easy It’s the BEST! WE BUILD COMMUNITIES! One home at a time! Interested? Contact: NH: Colleen Ladew 603-223-6035 Colleen.email@example.com VT: Cheryl Ducharme 802-748-8746 x 107 Cheryl.firstname.lastname@example.org www.rurdev.usda.gov USDA is an equal opportunity provider, em ployer, and lender. To file a com plaint of discrim ination w rite USDA, Director, Off ice of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C., 20250-9410 or call (800) 795-3272 (voice) or (202) 720-6382 (TDD).
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