USDA RURAL DEVELOPMENT WHAT IS RURAL DEVELOMENT n

USDA RURAL DEVELOPMENT

WHAT IS RURAL DEVELOMENT? n Census-based n US Department of Agriculture n Guaranteed against loss by USDA n Pays lender if borrower defaults

WHO CAN DO USDA LOANS? n Approved lender with HUD, VA, Fannie Mae or Freddie Mac n State Housing Agency n Farm Credit Service

IT’S THE GOVERNMENT! n Pays for itself – doesn’t use taxpayer money n Funded through the 2% Funding Fee (which can be financed into the loan!)

LOAN PURPOSE n Purchase new construction n Purchase existing home n Refinance (only if currently have a direct Rural. Development Loan) n Purchase Mobile Home (very limited; difficult)

REASONS TO NOT USE RURAL DEVELOPMENT FOR A BUYER Geographical Limitations n Maximum Income limitations n Can’t buy house with in-ground pool (can try for exception to this) n Primary Home Only n

INCOME QUALIFICATIONS n n Household adjusted annual income cap uses ALL occupants whether on the loan or not, that are 18 and over Counts gross income, overtime, commission, bonuses, net self-employment income, Social Security, Child Support, unemployment, etc. Based on family size & county where property is located http: //eligibility. sc. egov. usda. go v

ADJUSTMENTS TO INCOME n $480/Year per minor or full-time student n Verified child care expenses n $400/Year if borrower or coborrower is over 62 or disabled

Counties 1 person 2 person 34 person 56 person 78 person All Florida & Virgin Island Counties EXCEPT those listed below* 49, 550 56, 600 63, 700 70, 750 76, 400 82, 050 87, 750 93, 400 Clay, Duval, Nassau and St. Johns 51, 400 58, 750 66, 100 73, 450 79, 350 85, 200 91, 100 96, 950 Collier 56, 200 64, 250 72, 250 80, 300 86, 700 93, 150 99, 550 106, 00 0 Palm Beach 55, 700 63, 650 71, 600 79, 950 85, 900 92, 300 98, 650 105, 00 0 Gadsen, Jefferson and Leon 50, 000 57, 150 64, 300 71, 450 77, 150 82, 900 88, 600 94, 300 Okaloosa 50, 850 58, 100 65, 400 72, 650 78, 450 84, 250 90, 100 95, 900 * Broward, Pinellas and Monroe are NOT eligible

GEOGRAPHICAL QUALIFICATIONS ALL of Walton County n Destin n Niceville n Valparaiso n Crestview n West of Hurlburt in Okaloosa County n ALL of Santa Rosa County n

GEOGRAPHICAL LIMITATIONS FT. WALTON BEACH & SHALIMAR DO NOT QUALIFY

BENEFITS TO BUYERS n n n n Can finance 102% of appraised value, without getting cash back at closing (can get EMD, but no more) No Monthly Mortgage Insurance 30 -Year fixed rate with very competitive rates No loan limits (DTI/income limitations) Closing costs can be financed Unlimited gift or seller contributions No reserves required

$100, 000 Sales Price: $110, 000 Appraisal: $0 Closing Costs Seller Paying: $500 EMD: Closing/Prepaids $3, 000/$2, 000 2% Funding Fee: $2, 000 Can Finance: $107, 000 and get $500 EMD back

Sales Price: Appraisal: Seller Paying: EMD: 2% Funding Fee: $100, 000 $105, 000 ALL Closing/Ppds. $500 $2, 000 Can Finance: $102, 000 and get $500 EMD back

QUALIFYING Debt to Income Ratios = 29/41 n Debt to Income Ratios = 31/43 (for homes built after January, 2001) n Can go higher on DTI w/compensating factors: n 660+ Credit Score n Zero or very little payment shock n 2+ years continuous employment at same job n Rental/Housing history for 12 months required if credit score 619 or less (cancelled checks); if 620 or higher, not required n

OTHER CRITERIA n Do not own a dwelling currently n Lack sufficient resources to secure conventional credit n US Citizen, Permanent Resident, Resident Alien, or Qualified Alien n Have legal capacity to enter contract n Primary Residences Only

PROPERTY ELIGIBLITY n Must have access from a street, road or driveway n Site value less than or equal to 30% of total value n Leasehold estates (where applicable)

OTHER PROPERTY REQUIREMENTS n If on a well & septic, must be tested and meet county requirements n Pest inspection required – deficiencies must be corrected n Escrow for repairs under certain limited circumstances and will be 150% of cost n New construction – must have warranty

FUNDS AVAILABLE n RD has annual amount of funds appropriated by Congress n Funds must be reserved by the lender but can’t be until there is a fully-executed sales contract n Reservation is valid for 60 days n Have been known to run out before end of fiscal year

QUESTIONS?