USDA Guaranteed Rural Housing

Property Types (Eligible/Ineligible)

• To determine if subject property is located in a Rural Development Designated Rural Area, check http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Loan Amount

Minimum

• No minimum loan amount.

Maximum

• Maximum loan amounts for the GRH program will be dictated by the following:
  • Debt to IncomeRatio - Mortgage Principal, Interest, Taxes, Dues & Insurance can not exceed 29% of gross income.  Total debt can not exceed 41% of gross income.  (Rule is for 620 credit score or below.  The ratios can vary depending on GUS -Government Underwriting System findings 
  • Income - GRH Median Income Limits 

     

• USDA Guaranteed Rural Housing Loan Highlights

   

   

   

   

   

   

  • TARGET:  Moderate income households that can afford the monthly payments; however, do not have adequate funds available for a down payment.  Available for eligible primary home applicants in rural areas who do not currently own an adequate dwelling.
  • Loan Amount- 102% loan to Appraised Value: Includes purchase price, closing cost, tax prorations, hazard & tax reserves, inspections and reimbursement to the buyer of any deposits and inspections fees.  Can not directly finance loan discount points or buy down fees but the seller can assist 100%

     

  • Seller Contributions and Gifts: Unlimited    

     

  • Home Inspections needed:

     

  Fannie Mae Appraisal

   

   

   

   

   

  Pest

   

   

   

   

   

  Water Potability Test (If private well)

   

   

   

   

   

  Septic Certification

   

   

   

   

   

  (Properties with in-ground swimming pools are prohibited)

   

   

   

   

   

   

   

   

   

   

   

             

   

   

   

   

   

  Credit:Must be current. No lates, charge offs or collection accounts for the past year.  Any bankruptcy must be discharged at least 3 years.  Nontraditional credit is acceptable.  Credit scores are not used, however with a 620 credit score no Rental verification is needed and documentation is streamlined.

   Example income limits for Northeastern PA:

  INOME limits per # people in household:    1 thru 4           5 thru 8

   

   

   

   

   

  Pike County MOD.INC-GUAR.LOAN               $78,400           $103,500

   

   

   

   

   

  Lehigh ValleyMOD.INC-GUAR.LOAN               $80,500           $106,250

   CARBON County Same as Lehigh

   

   

   

   

  Monroe Co.  MOD.INC-GUAR.LOAN               $76,900           $101,500

   

• Carbon

   

MCC Tax Credits

• Mortgage Credit Certificates (MCCs) allow the borrower to receive a federal tax credit for a percentage of their mortgage interest.  GRH allows the borrower to participate in MCCs as follows:
  • When MLHL is participating in an MCC program the amount of the tax credit is considered an additional resource available for repayment of the loan when the credit is taken on a monthly basis from withholding.
  • Must submit a copy of the MCC and a copy of the applicant's Form IRS W-4, "Employee's Withholding Allowance Certificate," along with the other materials for the loan guarantee request.  The amount of tax credit is limited to the applicant's maximum tax liability.
  • The MCC must show the rate of credit allowed.
  • The Form IRS W-4 must reflect that the borrower is taking the tax credit on a monthly basis.
  • Must certify that the borrower has completed and processed all of the necessary documents to obtain the tax credit in accordance with this section.