USDA 102% Rural Housing Loan

Posted on January 6, 2009
Filed Under Home Loans, Homebuyers | 7 Comments

102% USDA Home Loan Program

(*Rural Development Loan, Rural Home Loan, USDA Loan, Rural Development Guaranteed Rural Housing, Rural Housing Loan)

Benefits:

102% financing based on appraised value – rather than based on purchase price. (could allow a certain amount to be financed toward home repairs)
30 Year Fixed Rate Mortgage
Refinance: Yes – rate reduction only – no cash back. Only GRH and 502 direct loans)
MI – No monthly mortgage insurance. Upfront guarantee fee of 2%.
Reserves: No payment reserves
Downpayment: No down payment
First Time Homebuyer – No first time home buyer requirement
Seller Concessions – No Maximum – over 6% requires comment from appraiser
Gifts – 100% gifting permitted. Donor must be disinterested third party

Debt to Income Ratio

Ratios – 29/41 – exceptions encouraged with compensating factors and RD concurrence
Non-occupant Co-borrower: Non-occupent co-borrowers not permitted unless approved by RD
Installment Debt – Include all installment debt greater than 6 months
Primary Income – Two-year history
Self-employment – Two years 1040’s and P&L
Alimony/child support – 12 month history with proof of 3 years continuance
Part time, Overtime & Bonus – 12 month history
Disability benefits – Benefits letter, 3 years continuance and gross up 125%
SSI benefits – Awards letter or 2 months bank statements, 3 years continuance and gross up 125%
Salary increases – Salary increases within 60 days of the first payment due date are acceptable
Maximum Income – US RD Moderate Income Limits

Credit

Credit Score – No minimum credit scores

Late payments – 1 x 30 permitted in last 12 months with explanations – Exceptions may be granted with 620 or greater middle credit scores

Bankruptcy / Foreclosure – Chapter 7 and 13 must be discharged for 3 years – Foreclosures must be completed 3 years ago – exceptions may be granted with 620 or greater middle credit scores.

Collections – Accounts cannot have been placed in collection status within the last 12 months – Exceptions may be granted with 620 or greater middle fico scores.

Judgements – Must be paid off for at least 12 months – Exceptions may be granted with 620 or greater middle fico scores.

Verification of Rent – If middle credit score is lower than 620 a VOR is required for the most recent 12 months.

Previous Housing Payment – not required

Non-traditional credit – Acceptable if no credit is available

Credit report – RMCR or Tri-Bureau merged

Homebuyer education – Case by case or when required by RD

*various terms are used in reference to the 102% USDA Home Loan, however, the loan referenced in this post is the 102% usda loan by the USDA – Rural Development Guaranteed Rural Housing Home Loan Program.

Comments

7 Responses to “USDA 102% Rural Housing Loan”

HC on January 26th, 2009 7:54 am

Looking to purchase home for the first time, would like more info on 102%loan.
PM on February 7th, 2009 5:46 am

Looking to purchase home for the first time, would like more info on 102%loan.
jt on February 8th, 2009 4:57 pm

Could USDA and columbia non Profit loans be used together? I could possibly buy sooner if I could get a personal loan for $15000 for 15 years. Have any ideas? I could buy sooner then.
cf on February 10th, 2009 4:47 pm

I am a first time home buyer and would appreciate more information.
CC on February 12th, 2009 9:14 pm

How do I apply for the 102%loan?
Jakob Kessi on July 2nd, 2009 3:47 am

I am a first time home buyer and want more info on how to apply and if homes in Vancouver Washington apply or which ones. Please provide more information on 102%loan.
Rodrick Agcaoili on July 11th, 2009 8:56 am

Does the USDA Home Loan allow a co borrower