100% USDA Rural Development Housing Purchase with Scores Down to 580!
Section 502 loans are mainly used to assist low-income individuals or households purchase homes in rural areas. The funds can be used to build, repair, renovate or relocate a home. The loan can also be used to purchase and prepare sites, including providing water and sewage facilities.
Ø 24 – 48 hours for underwriting & conditions
Ø Medical Collections & charge offs not included in ratios
Ø No Score/Low Score (581+) Manual Underwriting w/compensating factors
Ø Judgments w/pymt plan 3+ mos. prior to application ok (Except Federal)
Ø Private rent verification from landlords now accepted
Ø Installment debts w/10 payments or less may not be part of DTI ratio
Ø All non-taxable income can be grossed up 125%
Ø 2 Standard trade lines (open or closed) 12 months history – no lates
Ø Alternative Trade Lines (utilities, etc) acceptable – open 12+ mos.
Ø Co-signed debts may be removed from ratio subject to UW discretion
Ø New Re-entering workforce guidelines
Ø Home Repair Escrow up to $10,000 or 10% of loan
Ø 6% Seller Concessions-Gift funds from household member permitted
Eligibility: Applicants for loans may have an income of up to 115% of the median income for the area. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. Also, all applicants must have reasonable credit histories.
Terms: The loans are for 30 years and the promissory note interest rate is set by the lender. There is also no required down payment. The lender must also determine repayment feasability, using ratios of repayment (gross) income to PITI (Principal Interest Tax Insurance) and to total family debt.
Standards: Under the section 502 program, housing must be modest in size, design and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards.
Approval: Rural Development officials have the authority to approve most Section 502 loan guarantee requests.
To find out if the property you're interested in qualifies for a USDA Rural Development Loan visit http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do