2. WHAT IS RURAL DEVELOMENT?WHAT IS RURAL 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
Victor Bals
734-417-2115
Vic@HVFloans.com
3. WHO CAN ORIGINATE USDA LOANS?WHO CAN ORIGINATE USDA LOANS?
Approved lender with HUD, VA, FannieApproved lender with HUD, VA, Fannie
Mae or Freddie MacMae or Freddie Mac
State Housing AgencyState Housing Agency
Farm Credit ServiceFarm Credit Service
Victor Bals
734-417-2115
Vic@HVFloans.com
4. LOAN PURPOSELOAN PURPOSE
Purchase new constructionPurchase new construction
Purchase existing homePurchase existing home
Refinance (only if currently have aRefinance (only if currently have a
Rural-Development Loan)Rural-Development Loan)
Purchase MobilePurchase Mobile Home (very limited; difficult)Home (very limited; difficult)
Victor Bals
734-417-2115
Vic@HVFloans.com
5. REASONS NOT USEREASONS NOT USE
RURAL DEVELOPMENTRURAL DEVELOPMENT
FOR A BUYERFOR A BUYER
Geographical LimitationsGeographical Limitations
Maximum Income limitationsMaximum Income limitations
Can’t buy house with in-ground pool (canCan’t buy house with in-ground pool (can
try for exception to this)try for exception to this)
Primary Home OnlyPrimary Home OnlyVictor Bals
734-417-2115
Vic@HVFloans.com
6. INCOME QUALIFICATIONSINCOME QUALIFICATIONS
http://eligibility.sc.egov.usda.govhttp://eligibility.sc.egov.usda.gov
Household adjusted annual income cap uses ALLHousehold adjusted annual income cap uses ALL
occupants whether on the loan or not, 18 and overoccupants whether on the loan or not, 18 and over
Counts gross income, overtime, commission,Counts gross income, overtime, commission,
bonuses, net self-employment income, Socialbonuses, net self-employment income, Social
Security, Child Support, unemployment, etc.Security, Child Support, unemployment, etc.
Based on family size , county, property is locationBased on family size , county, property is location
7. ADJUSTMENTS TO INCOMEADJUSTMENTS TO INCOME
$480 / Year per minor or full-time student$480 / Year per minor or full-time student
Verified child care expensesVerified child care expenses
$400 / Year if borrower or co-borrower is$400 / Year if borrower or co-borrower is
over 62 or disabledover 62 or disabled
9. GEOGRAPHICAL QUALIFICATIONSGEOGRAPHICAL QUALIFICATIONS
ALL Livingston CountyALL Livingston County
Most of Ingham CountyMost of Ingham County
Parts of Oakland CountyParts of Oakland County
Parts of Washtenaw CountyParts of Washtenaw County
Parts of Wayne CountyParts of Wayne County
Most Rural Parts of MichiganMost Rural Parts of MichiganVictor Bals
734-417-2115
Vic@HVFloans.com
10. BENEFITS TO BUYERSBENEFITS TO BUYERS
Finance 102% of appraised value, without gettingFinance 102% of appraised value, without getting
cash back at closing (can get EMD, but no more)cash back at closing (can get EMD, but no more)
No Monthly Mortgage InsuranceNo Monthly Mortgage Insurance
30-Year fixed rate with very competitive rates30-Year fixed rate with very competitive rates
No loan limits (DTI / income limitations)No loan limits (DTI / income limitations)
Closing costs can be financedClosing costs can be financed
Unlimited gift, seller contributions 6% maxUnlimited gift, seller contributions 6% max
No reserves requiredNo reserves requiredVictor Bals
734-417-2115
Vic@HVFloans.com
11. Sales Price:Sales Price:
Appraisal:Appraisal:
Seller Paying:Seller Paying:
EMD:EMD:
Closing / Pre-paidsClosing / Pre-paids
2% Funding Fee:2% Funding Fee:
$100,000
$110,000
$0 Closing Costs
$500
$3,000/$2,000
$2,000
Can Finance: $107,000 and get $500 EMD back
Victor Bals
734-417-2115
Vic@HVFloans.com
12. Sales Price:Sales Price:
Appraisal:Appraisal:
Seller Paying:Seller Paying:
EMD:EMD:
2% Funding Fee:2% Funding Fee:
$100,000$100,000
$105,000$105,000
ALL Closing / Pre-Paid ItemsALL Closing / Pre-Paid Items
$500$500
$2,000$2,000
Can Finance: $102,000 and get $500 EMD back
Break it Down
Victor Bals
734-417-2115
Vic@HVFloans.com
13. QUALIFYINGQUALIFYING
Debt to Income Ratios = 29/41Debt to Income Ratios = 29/41
Can go higher on DTI w/compensating factors:Can go higher on DTI w/compensating factors:
660 + credit score required660 + credit score required
Payment shock consideredPayment shock considered
Reserves consideredReserves considered
Rental / Housing history not required withRental / Housing history not required with
620 credit or higher620 credit or higherVictor Bals
734-417-2115
Vic@HVFloans.com
14. OTHER CRITERIAOTHER CRITERIA
Do not own a dwelling currentlyDo not own a dwelling currently
Lack sufficient resources to secureLack sufficient resources to secure
conventional creditconventional credit
US Citizen, Permanent Resident, Resident AlienUS Citizen, Permanent Resident, Resident Alien
Have legal capacity to enter contractHave legal capacity to enter contract
15. PROPERTY ELIGIBLITYPROPERTY ELIGIBLITY
Must have access from a street, roadMust have access from a street, road
or drivewayor driveway
Site value less than or equal to 30% ofSite value less than or equal to 30% of
total value of home and landtotal value of home and land
Leasehold estates (where applicable)Leasehold estates (where applicable)
16. OTHER PROPERTYOTHER PROPERTY
REQUIREMENTSREQUIREMENTS
Well & septic tested if county requiresWell & septic tested if county requires
Water test for private wells requiredWater test for private wells required
Escrow for repairs under certain limited circumstancesEscrow for repairs under certain limited circumstances
and will be 150% of cost of the repairs held in escrowand will be 150% of cost of the repairs held in escrow
New construction - must have warrantyNew construction - must have warranty
17. FUNDS AVAILABLEFUNDS AVAILABLE
Annual funds appropriated by Congress.Annual funds appropriated by Congress.
Have been known to run out before end of fiscalHave been known to run out before end of fiscal
year. Congress must appropriate new funds foryear. Congress must appropriate new funds for
the programthe program
Victor Bals
734-417-2115
Vic@HVFloans.com
