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Your USDA lending partner

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Direct Housing Loans loans made by USDA Rural Development to low and very low ... Termite Inspection is always required. New Construction. Stick & Modular ... – PowerPoint PPT presentation

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Title: Your USDA lending partner


1
Rural Development Single Family Housing
Programs

Your USDA lending partner
2
502 DIRECT RURAL HOUSING LOANS
Direct Housing Loans loans made by USDA Rural
Development to low and very low income applicants
to buy, build or repair homespayments may be
subsidized.
3
Direct Guidelines
Income (Kiowa County/Low Limitssee map for other
county contacts) 1 2 3
4 5 6 7
8 27,900 31,900 35,850 39,850 43,050
46,250 49,400 52,600
  • Loan Terms
  • Up to 100 of the Appraised Value
  • Maximum repayment period is 33 years under
    certain conditions, 38 years
  • Often partner with other programs

4
Direct Loan Process
  • Pre-Qual Mtg. Face to Face mtg. to go over
    application with in file credit report and
    determine goals and options.
  • Application Completing the Uniform Residential
    Loan Application, Verification Process and
    complete credit check.
  • Eligibility Verifications complete and ratios
    comply with our guidelines. Issue a certificate
    of eligibility.
  • Approved The house is appraised and has passed
    necessary inspections, funding is available.

5
K H R C Kansas Housing Resource Corporation
  • Program designed to provide down payment
    assistance for purchase of a home for those
    income qualified.
  • Loan may be from 15 to 20 of the purchase price
    of the home (maximum grant not to exceed
    20,000).
  • Special Kiowa County Program available for new
    construction.
  • Additional inspection required
  • Loan is forgiven over 10 year period as long as
    owner occupied.

6

Jane Doe 20,080 year (gross) / Monthly Repay.
Income 1673.33 Household Size 4 person 1
adult 3 children Max 39850 Jane 100,000.00
Purchase Price of House How might Jane qualify to
purchase her home? For KHRC she would qualify for
20 Grant Assistance.
  • 100,000.00 Loan
  • 6.25
  • Payment 807.00
  • (including taxes at 1,500 insurance at 800)
  • PITI 48.00
  • 100,000.00 Loan
  • 20,000.00 KHRC
  • 80,000.00 RD Loan
  • Payment 429.00 (including taxes at 1,500
    insurance of 800)
  • PITI 25.63
  • after payment assistance of 240.46 per month

7
504 HOME REPAIR GRANT PROGRAM
Home Repair Loans 1 loans made by USDA RD up
to 20,000 to very low income applicants to
repair the home they occupy and own. Home Repair
Grants Grants made by USDA RD up to 7,500 to
very low income senior (62) applicants to repair
the home they own to remove safety and healthy
hazards. (Special disaster Area limit now
15,000)
8
504 Income Guidelines
Income (Kiowa County/Very Low Limitssee map for
other county contacts) 1 2 3
4 5 6 7
8 17,450 19,900 22,400 24,900 26,900
28,900 30,900 32,850
  • Loan Grant Terms
  • Loanmaximum repayment period is 20 years
  • Grantforgiven over 3 years if property is not
    transferred

9

Guaranteed Rural Housing (GRH) Program
Your USDA lending partner
10
Home Buyer Benefits
  • 102 LTV
  • No Mortgage Insurance
  • 30 Year Fixed Rate
  • Partner with other Funding Sources
  • No Loan Limit
  • Fees Repairs may be Financed
  • Unlimited Gifts or Seller Contributions

11
GRH Loan Purposes
  • Purchase New
  • Stick, Modular or Manufactured
  • Purchase Existing
  • Stick, Modular
  • Repairs (initial loan only)
  • Typical Loan Closing Costs to 100 of appraisal
  • 2 GRH Fee can be financed above appraised value
  • Limited Refinance RD Direct or GRH ONLY

12
Prohibited Purposes
  • Furniture Personal Property
  • Existing Manufactured Home
  • Income Producing Property
  • In-Ground Swimming Pool

13
Acceptable Credit
  • No Credit Lines ? Bad Credit
  • Scores NO MINIMUM
  • 620 automatic credit approval no further
    review of credit required, unless there is
    delinquent Govt. debt or prior Agency loss
  • lt 620 review per Rural Development Regulations.
    If there is adverse credit per RD criteria, the
    underwriter can consider an Adverse Credit Waiver

14
Existing Dwelling Standards
  • Existing dwellings must be structurally sound,
    functionally adequate, in good repair
  • Meet HUD standards and RD Thermal standards
  • Rural sites must be lt 20 acres unless larger
    tract is required to meet County requirements

15
Mapped Flood Hazard Areas
  • Existing Homes
  • Federal flood insurance required
  • New Construction Prohibited

16
Inspections
  • Lender determines who is qualified to inspect
    properties.
  • Private Wells water test required
  • Septic systems need to be approved by county
    health dept. or a licensed septic system
    professional.

17
Existing Property Inspections
  • Certify property is structurally sound,
    functionally adequate, in a state of good
    repair
  • Meets Agency Thermal Criteria
  • Termite Inspection is always required

18
New Construction
  • Stick Modular
  • Plans specs certified by local building
    authority or authorized certification official
  • Built in accordance with approved building
    codes-varies by state
  • Conform to Rural Development Thermal code Model
    Energy Code of 1992 or better

19
New Construction
  • Manufactured
  • New Units ONLY
  • Agency Approved Dealer Contractors
  • Includes unit related site development work
  • Unit must be placed on a permanent foundation
  • Not eligible in Chase Single Close Pilot

20
New Construction Inspections
  • Three Required Inspections with 1 Year Builders
    Warranty
  • Footing, Rough-In, Final
  • OR
  • Final Inspection with 10 year warranty
  • OR
  • Certificate of Occupancy with a 1 year Builders
    Warranty

21

Chase Single Close Construction Pilot
Your USDA lending partner
22
GRH Single Close New Construction Pilot
  • 30-year fixed, one-time close
  • Borrowers may choose any builder
  • 102 financing of appraised value
  • Loan Guarantee issued at closing, before
    construction starts
  • Separate builder line of credit not needed

23
Lender Participation
  • Loan must be underwritten and closed by Chase
    during pilot
  • Lenders act in a broker relationship with Chase
  • When new GRH regs come out in 12-18 months, other
    lenders will be allowed to participate directly
    like Chase does now

24
GRH Single Close Construction Pilot 4 Approvals
of a GRH Construction Loan
  • Borrower
  • Property/Project
  • Builder
  • USDA, Rural Development

25
GRH Single Close Construction Pilot Borrower
Requirements
  • Income Qualification - same
  • Credit Scores - 620 for the borrower and 620 for
    Co-borrower but exceptions can be made

26
GRH Single Close Construction Pilot What may be
financed?
  • Land
  • Construction Contract Cost
  • Costs outside of contract (Wells, Septic,
    Landscaping, Driveways, etc.)
  • Other construction fees and costs
  • Architectural/Engineering Fees
  • Building Permits/Fees
  • Survey Flood Elevation
  • Title Updates
  • Builders Risk Insurance/Course of Construction
    Insurance
  • 5 Contingency Reserve
  • Draw Control / Inspection Fee to Granite Loan
    Management (.15)

27
Property Requirements
  • Must be in an RD eligible area
  • Single family detached
  • Owner occupied, primary residence
  • No manufactured homes, Lot loans or Spec Homes
    Modular homes are OK
  • No flood zones
  • No in-ground pools
  • Borrowers can not own other adequate housing in
    their local commuting area

28
GRH Single Close Construction Pilot Builder
Approval
  • All builders must be licensed General Contractors
    if required by the state or local building
    authority
  • Builders must have 660 credit score, (Exceptions
    for 620-659) Companies with 10MM in annual sales
    must have a Dunn Bradstreet Paydex of 60
  • Builders must not have criminal records
    pertaining to fraud, embezzlement or violent
    crimes

29
GRH Single Close Construction Pilot Builder
Approval
  • 3 references required from Suppliers, Subs,
    Clients (9 total)
  • Workmans Comp required for all employees or
    exemption letter from the state
  • Builders must have 600,000 of Liability Ins.
  • Builder must provide a minimum 1 year warranty
  • Granite Loan Management Approves the builder

30
Contacts for Builder/Lender Approval
  • Send an e-mail or call
  • Brandee Velez of Chase 954-422-1233
  • brandee.a.velez_at_chase.com
  • OR
  • Kevin Culley of RD 785-271-2722
  • kevin.culley_at_ks.usda.gov

31
Please contact us at..
  • USDA Rural Development
  • Office at Greensburg City Hall
  • Or
  • 2715 Canterbury Dr
  • Hays, KS 67601
  • Phone (785) 628-3081
  • Fax (785) 625-6065
  • Email kent.colwell_at_ks.usda.gov
  • Or
  • 2106 East Spruce
  • Garden City, KS 67846
  • Phone (620) 275-0211
  • Fax (620) 275-4903
  • Email james.sabourin_at_ks.usda.gov
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