Guaranteed Loan Program

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Guaranteed Loan Program - Single Family Housing-
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United States Department of Agriculture
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Single Family Housing Guaranteed Loan Program
(SFHGLP)

• Loan made, held, and/or serviced by an approved
  SFHGLP lender
• Guaranteed against loss by USDA

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Home Buyer Benefits

• 100 LTV SFHGLP Fee
• 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
• No Reserves Required

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Lender Benefits

• 100 LTV SFHGLP Fee
• Expand Market Share
• Lender Profitability
• Guaranteed by Government
• Lender Underwrites Loan
• Quality Customer Service

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Tools Available Online

• Iowa SFHGLP Handbook
• Newsletters
• RD Instruction
• Administrative Notices (ANs)

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www.rurdev.usda.gov
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www.rurdev.usda.gov/ia/rhsguar.html
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Rate and Term

• 30-Year Fixed
• Interest Rate Set by Approved Lender
• Capped by RD
• One-Time GRH Fee
• 2.00 Purchase Loans
• .5 Refinance Loans

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Loan Purposes

• Purchase New
• Stick or Modular
• Manufactured
• Purchase Existing
• Stick or Modular

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More Loan Purposes

• Repairs
• Typical Loan Closing Costs
• Refinance
• RD Direct
• Guaranteed Loan

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Prohibited Purposes

• Construction Draws
• Furniture Personal Property
• Existing Manufactured Home
• Income Producing Property
• Non-Essential Buildings Land
• In-Ground Swimming Pool

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Income

• Household adjusted annual income may not exceed
  the MODERATE INCOME limit.
• Limits based on family size county where the
  property is located
• Income Property Eligibility web site at
  http//eligibility.sc.egov.usda.gov/eligibility/we
  lcomeAction.do

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Adjusted Annual Income

• Income of all Adult Household Members
• Gross income
• OT, commissions, bonuses, etc.
• Net self-employment income
• SS, child support, unemployment, etc.

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Adjusted Annual Income

• Adjustments
• 480 per minor or full-time student
• Verified child care expenses
• 400 where borrower or co-borrower is elderly or
  disabled

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http//eligibility.sc.egov.usda.gov/eligibility/we
lcomeAction.do
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Repayment Income

• Adequate Dependable Income
• Repayment Income ? Adjusted Annual
• OT, commission, self-employment, bonus income
  should have a 24 mo. history
• Earned Income Credit may be added
• Non-taxable income may be grossed-up

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Repayment Ability

• PITI 29.0
• TD 41.0
• Include all debts 6 months
• May exceed Ratio Limits with documented
  compensating factors such as
• Zero or little payment shock
• 620 Credit score
• 2 years on the job
• And More

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Credit Verification

• Verification
• Residential Mortgage Credit Report (RMCR)
• Tri-Merged Credit Report
• Credit Alert Interactive Voice Response System
  (CAIVRS)
• Rent History 12 months
• Required only if FICO lt 620

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Credit History

• No Credit Lines ? Bad Credit
• Scores NO MINIMUM
• 620 no further review of credit
• lt 620 review per Rural Development Regulations
• Credit Waiver from Lenders Underwriter
• Temporary circumstances,
• Beyond applicants control,
• and Circumstances removed
• or
• Justifiable Dispute

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Risk Layering

• The Big Picture
• NO ADDITIONAL Risk Layering if Payment Shock
  exceeds 100
• (unless there are multiple compensating factors)
• LENDER underwrites

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Other Criteria

• Do not own a dwelling
• Insufficient resources to secure conventional
  credit without the Guarantee
• U.S. Citizen or Permanent Resident or Qualified
  Alien
• Legal Capacity
• Primary Residence

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Site Eligibility

• Must be in Rural Area
• http//eligibility.sc.egov.usda.gov/eligibility/w
  elcomeAction.do
• Access from a Street, Road or Driveway
• Site Outbuilding Values
• 30 of total value

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Flood Mudslide

• Existing Property
• must have flood insurance
• must be able to afford per ratios
• New Construction
• not eligible in flood area in Iowa

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Appraisal Inspection

• Properly Licensed or Certified Appraiser
• Reviewed by Rural Development
• Lender determines who is qualified to inspect
  properties - typically appraiser

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Existing Property Inspections

• Certify property is structurally sound,
  functionally adequate, in a state of good repair

NO MORE THERMAL REQUIREMENTS
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Inspections

• Documentation that HUD Handbooks 4905.1 4150.2
  requirements met
• -or-
• Home Inspection

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Repairs

• May be included in the Loan
• Completed prior to issuance of the Loan Note
  Guarantee
• Escrow for LNG
• permitted when
• weather prevents
• completion

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The Process
Lender accepts application.
Lender pre-qualifies application.
Lender reserves SFHGLP funds with RD.
Lender processes application.
Lender submits complete application to RD.
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The Process
Rural Development issues Conditional Commitment
within 24 hours.
Lender closes loan.
Lender submits closing package to Rural
Development.
Rural Development issues Loan Note Guarantee to
Lender.
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Iowa Offices
http//www.rurdev.usda.gov/ia/rhsguar_Iowa_SFHGLP_
Staff.html
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Guaranteed Underwriting System

• Pre-qualification
• Determine eligibility
• Submission

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Why Use GUS

• No fee to users
• Simple available 24 hours a day
• Exact property income eligibility
• Pre-filled forms (1003 1980-21)
• Findings to address items sooner
• Even faster loan decisions

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Questions?