What are the requirements for the USDA program in Abilene? So that’s going to be looking at a 640 minimum credit score requirement.
There is a income requirement too when applying for a USDA Loan Abilene.
So basically the income requirement is about 78,000 if you’re in a family of 1 to 4 if you’re in a family of 5+ that’s gonna go up to about $103,000 on the income limit.
The big requirement for USDA is that it’s property specific.
It’s got to be in a USDA Approved Zone. How much down payment does this program require?
It’s actually 0% down payment which is Great!
Ok Awesome, and how much does the average home buyer come in with out-of-pocket?
So because your down payment for a USDA Loan in Abilene is covered you’re just gonna have to come in with again your prepaid and closing cost So if it was a $300,000 purchase.
you’d be looking at about $7,500 cash for keys to get in the home.
What type of home buyer is the USDA Loan program Ideal for? So this is going to be ideal for the home buyer that’s looking for a property in those specific areas.
Ideally it’s properties that are going to be USDA Eligible rural zones.
So not right in the middle of the city, but maybe if it’s more on the outskirts, on a little bit of land, lower tax rate areas that’s probably going to be a property that’s eligible and that would be ideal because that one would probably qualify OK, Fantastic.
What is a USDA Home Loan?
I bet you’re wondering, what is a USDA home loan?
Designed with the residents of more rural areas in mind, the United States Department of Agriculture designed its loan program to enrich rural communities by providing affordable home loan options to low-income households that may not be able to secure home financing through other means.
Who has time to stop and smell the roses? You don’t, and this isn’t even a rose.
What are the requirements for the USDA program?
So USDA has a few interesting requirements First of all, you’ll need to have at least a 580 credit score Some lenders require a 620 credit score.
Your household income has to be under the county maximum Like a lot of down payment assistance programs. This is based on family size So 1 to 4 is one category and then 5 and above is a higher threshold for qualifying
What’s unique about this one is the home has to be within a designated area.
So, Typically what that means is.
NOT within a metropolitan area So within our area here (Riverside county) Our local cities around her don’t qualify But we only need to go 10 miles away to where there’s an open area where there’s Several homes that qualify.
USDA stands for United States Dept of Agriculture But it’s NOT a farm loan.
Specifically, they don’t finance this program for farms in Abilene.
It has to be a Single Family home in the Abilene area, without a barn structure on the property.
Then it also has some home price limitations.
The Threshold is a little bit lower than say an FHA loan for the loan limits.
Ok, and how does this program differ from other Down payment programs?
So it’s different because it’s not really a down payment program but it allows financing up to a 100% of the purchase price And it’s interesting because you can actually use this program with 1 or 2 of the other programs.
If you need closing cost assistance But, what’s unique it’s a 100% Financing so you don’t need a 2nd or a 3rd lien on the property.
Your interest rates are typically lower than if you combine it with a down payment assistance programs and you don’t have to repay any down payment assistance.
It has a monthly factor It’s like mortgage insurance upfront It’s financed at a monthly component.
Much less than FHA So if you can qualify for this program It’s better than FHA And As I mentioned, rates and payments Are typically lower on this program So USDA is really a great program.
And on average How much does the home buyer have to come in with out-of-pocket?
So Again, we are financing the whole loan Purchase price up to 100% So the only thing remaining is then the closing costs Typically, plan on around 3% of the purchase price for funds to close.
The question there then becomes, Well, Where does that come from? Typically, we ask the seller to cover those costs And if we can get the seller to cover 3% Then, the buyer may only need to come in with an earnest money deposit.
And they may even get most or all of that back.
If the seller is covering all the fees.
One unique feature about USDA Versus all other loans is that if the home appraises for more than the purchase price.
We can finance the closing costs up to that appraised amount So, no other loan I know that we can actually finance the closing costs.
What type of home buyer is this program ideal for?
So certainly those that don’t have access to money for a down payment Anyone that wants to live that doesn’t have to live within a metropolitan area because, again, the house has to be in an area that is not in a high densely populated area.
It’s also suited well for people who have some credit issues and anybody that qualifies for this program would definitely be better served than going FHA so those type of people.
And besides the Area restrictions are their any other property restrictions? So property restrictions are going to be similar to FHA They’ll do manufactured homes.
They’ll do homes with Casitas So no real other restrictions.
Just if it conforms to the FHA guides then it should qualify for USDA There’s a couple little quirky things that you don’t run into very often like you can’t actually have a barn on the property It definitely can’t be for agricultural purposes It has to be for residential purposes.
USDA Loan Abilene – Do You Pre-Qualify?
Today we're gonna talk about FHALoans in 2019 and What You Need To Know.
And we're getting started right now! (INTRO) Hey what's going on! How you doing?! I'm Emmett Dempsey, Mortgage Advisor with Geneva Financial here in beautiful Port St Lucie Florida and welcome to another mortgageand home buying tip.
If this is your first time here, and you want to learn more about mortgages or the home buying process in general; go ahead and subscribe to my channel and ring that Bell so you don't miss anything.
FHA loans in 2019 what you need to know.
Buying a house with an FHA loan or refinancing to FHA loan could be very very advantageous.
There's a lot of goodpoints to the FHA loan and I'll go over just a few of them.
First and foremost, itonly requires three and a half percent down payment I know I saw a study almost 3/4 of people think you need 20% down.
But for an FHA loan you onlyneed three and a half percent down.
The FHA loan is a very good loan because Icame about, you know, in the '30s after the crash of '29, and back in those dayspeople had to put down at least 50% of the property have a balloon payment soit really cornered off how many people can actually buy a house so this allowedmore buyers to buy more real estate that's why we kinda have the robustmarket we have today.
So again 3.
5% down lower FICO scores you can go as low as 500 FICO some lenders will go down that low from 500 to 579 is 10%down whereas a 580 or above the only 3.
Also since it is FHA is insured, you know since you paid a funding fee and mortgage insurance you knowthat's one thing you pay for it allows for very low interest rates so comparedto conventional vs FHA your interest rate will be lower because thethe risk to the lender is insured with FHA mortgage insurance.
Also FHA loans will allow a higher debt to income limit so I've had some FHA loansgo as high as 56% so uh you know usually at 43 45 was that was the cut off what alot of lenders will have an overlay for that.
We go all the way for as longas we can get approval.
So I've had a lot of FHA loans that are you know over 50%that would have never gotten approved anywhere else but our company so that's one thing.
Some of the drawbacks about FHA loans, they do require, you know, there'ssome property requirements, you know , they you know, and they're not as big as asyou would think.
They just require have it be livable like you can havehave any wood rod or anything of that nature of their owner-occupied only soyou do not for fixer-uppers so but there is an FHA program for fixer-upperscalled called the 203K and you know we'll go over that in a differentdifferent conversation so but for a normal FHA loan you have a new goodproperty requirements it's good for you as the buyer because you can have alower FICO lower down payment things like that also at FHA loans allow forall gift funds I've had some FHA loans where my client got a grant from thecity and they paid like a hundred dollars they're actually paid nothing atclosing because I we funded the appraisal and they paid nothing so youknow FHA loans allow some some very creative financing options if youwant to learn about your FHA loan scenarios you know give me a call or go to www.
Com and put in your info and I'llget back in contact with you and as always you want to learn more aboutmortgages at the home buying process in general go ahead and subscribe to mychannel ring that bell so you don't miss anything thank you so much for watchingand I'll see you on the next one!.
Your Local Mortgage Lender | Total Mortgage Minute
[MUSIC PLAYING] Hello, and welcome toCalHFA's lender training.
My name is Molly Ellis.
Our focus in this videois our FHA first mortgage programs, basic guidelines,and the common ways to layer closing costs and downpayment assistance programs to benefit your borrower.
First let's talk aboutour CalHFA FHA program.
This is a standardFHA first mortgage.
It has a maximumloan-to-value of 96 and 1/2%, and a maximum combinedloan-to-value of 105%, with a minimumcredit score of 640, and a maximumdebt-to-income ratio of 45.
Technically, CalHFA doesn'thave a loan amount limit.
However, we do chargea high balance fee for any loan over $484,350.
This would only beapplicable if the FHA loan limit in the countythe property is located allows you to exceed $484,350.
Otherwise, you'd have toadhere to the FHA loan limit.
For the highbalance fees, please check out the rate pageon CalHFA's website.
Next is our CalPLUS FHA program.
CalPLUS FHA is also anFHA-insured first mortgage.
But it comes with built-inclosing cost assistance called Zero Interest Program, or ZIP.
CalHFA offers ZIPwith a loan amount at 2% of the totalfirst mortgage, or ZIP with the loan amount at3% of the total first mortgage.
Please check out ourrate page for pricing.
Although ZIP has a zero interestrate with deferred payments, it is a loan andmust be paid off when the borrowersells, refinances, or at the end ofthe 30-year term.
The borrower must be afirst-time homebuyer.
And remember, the definitionof a first-time homebuyer is someone who is not owned andoccupied a principal residence in the past three years.
The third FHA-insuredfirst mortgage we'll cover is our Cal-EEMplus Grant Program.
This is an FHA-insuredenergy efficient mortgage with an additional4% grant from CalHFA.
The borrower mustuse the EEM grant towards energyefficient upgrades.
In order for thegrant to be forgiven, the borrower must occupy theresidence for three years.
Then we'll release the lien,and the grant will be forgiven.
You can find a listof facilitators by clicking on CalHFA'sLenders/Real Estate Agents section of the website, choosethe Loan Program HandBooks tab, then choose the EEMplus grant program.
It is not mandatory thatyou use a facilitator, but CalHFA does recommend it.
The energy efficientimprovements are finished afterthe close of escrow, so it doesn'tdelay your closing.
Your lender just has to beOK with managing the escrow holdback.
Next up is the Limited 203Koption on our FHA programs.
What a great way toaffordably finance minor repairs for yourborrower up to $35,000.
Follow all FHA guidelinesas to eligible improvements, completion times,and disbursements.
Just like the EEM,your lender has to be OK with managing thepost-closing documentation.
For all CalHFA FHA programswhere the borrower is required to be a first-time homebuyer,homebuyer education is required for at leastone borrower on the loan.
CalHFA allows for amanually underwritten loan with some overlays.
The minimum credit scorewould need to be 660, and the maximum DTI is at 43.
Remember, that's onlyon a manual underwrite.
If the loan has anautomated approval, the minimum FICO is still640, and the max DTI is 45%.
What makes our program so greatis our down payment assistance and closing cost assistance.
Layer these programswith our first mortgages to increase affordabilityfor your home buyers.
For example, if yourborrower is employed in a K through 12 publicschool in California, they would be eligible forCalHFA's School Teacher and Employee Assistance Program.
This mortgageassistance will lend 4% in down payment or closing costsat a very affordable 3 and 1/4 simple interest rate.
Or if your client doesn't workin California's public schools, they can use our MyHomeAssistance Program.
MyHome is 3 and 1/2% of thesales price or the appraised value, whichever is less,which could get your borrower almost 6% or 7% in mortgageassistance when you layer it with CalPLUS and ZIP.
The interest rate is only3 and 1/4 simple interest with deferred payments.
And whether you'reusing the school program or theMyHome program, it does need to be insecond lien position, and your borrower needs tobe a first-time homebuyer.
That covers our FHAfirst mortgage programs and the mortgage assistancethat can be layered with them.
Now let's move on to propertyrequirements and maximum lender origination fees.
The property requirementsfor these programs, for the most part,follow FHA guidelines.
Also make sure you adhere toany lender or investor overlays.
The sales price ofthe property must be within CalHFA's publishedsales price limits.
A one-year homewarranty is required for first-time homebuyersunless they are purchasing new construction.
Manufactured homesare only allowed with a minimum credit score of660 and an automated approval.
There is no manual underwritingon manufactured homes.
Also, we don't allowthe Limited 203K option on a manufactured home.
The property cannotexceed five acres.
And lastly, if the propertymeets FHA guidelines for an accessory dwellingunit, then, as allowed, you can count the rental income.
Now let's talkabout lender fees.
First, to originateCalHFA loans, you must be aCalHFA-approved lender.
The maximum a lender cancharge in lender fees on the first mortgage is 3%.
This includes origination,processing, and underwriting.
It does not includeany third party fees.
Our rates are at par, so youhave to charge origination on these loans.
But with the closing costand down payment assistance from ZIP andMyHome, the borrower will still have very littleout-of-pocket expenses.
CalHFA will allow you to chargean additional subordinate processing fee of $250 forMyHome or the school program, and an additional $50 dollarsprocessing fee for ZIP.
Also, you may not chargeany additional fees, like origination,per diem interest, on the subordinate loans.
We want to help make this easy,so we have provided some tools to help you process loanswith CalHFA programs.
The Loan Program HandBookfor each one of our programs includes all the detailsabout the program in one easy handbook.
The Loan Program Matrixprovides a quick reference of terms and requirementsfor all CalHFA programs.
The very popular LoanScenario Calculator will help you calculateloan amounts and print results for your borrowers.
You can find these toolsunder Lenders/Real Estate Agents on our website.
Click on Loan Program HandBooksfor the program handbooks, the calculator icon for theLoan Scenario Calculator, and the Tools, Affidavits, &Docs tab for the Loan Program Matrix.
Now let's look at the funstuff before we close.
Our single familylender training team offers in-person trainingclasses every month across the state.
Attend a four-hourworkshop to learn all about CalHFA's programs.
Classes are announcedeach month on our website and through our monthlyeNews announcements.
To sign up for a class,visit CalHFA's website, choose the Training Calendarlink under Lenders/Real Estate Agents, and sign up for a classthat will work best for you.
We also provide customizedmarketing materials that can be downloadedfrom our website by clicking on theLenders/Real Estate Agent section of the website,choose the Loan Officers tab, then choose the Sales, Tools,& Marketing Materials link.
For any questions you may have,contact Single Family Lending at 916-326-8033.
Or you can email ourlender services division at LenderTraining@calhfa.
Thank you so much for your time.
Now get out there andhelp more Californians have a place to call home.