PROPERTY REQUIREMENTS

NEW CONSTRUCTION AND EXISTING HOMES

NEW CONSTRUCTION -- Prior to issuance of the loan note guarantee, lender must certify that the following certifications, inspection reports and warranties have been obtained by the lender and are satisfactory:

· Construction Inspections -- Certification that foundation, framing and final inspections have been completed in compliance with local and state requirements and codes.

· Builder's 1 year Warranty or 10-year Homeowner's Warranty -- If 10 year warranty is provided, the foundation and framing inspections a waived.

· Permits and Clearances
Notice of Occupancy and Certification of Occupancy Well and septic certifications for local health authority or private licensed firm.

EXISTING HOMES

All existing homes ( 12 months or older ) must be structurally sound, functionally adequate and placed in good repair prior to the issuance of USDA's loan note guarantee. The following documentation and certifications must be submitted to USDA Rural Development prior to the issuance of the loan guarantee:

For All Existing Homes:

· Termite report and clearance (Section 1 items to be cleared. Section 2 items to be completed only when a health and safety is issued.)

· Signed certification from qualified inspector that the home meets the requirements contained in USDA Rural Development " Existing Home Certification". Inspection completed by individual determined qualified by lender. Also acceptable is a Valuation Condition (VC) Form prepared in accordance with HUD Handbook 4150.2 for existing home inspection compliance.

DOES YOUR PROPERTY QUALIFY? CLICK HERE

               CREDIT REQUIREMENTS

MITIGATING UNACCEPTABLE FACTORS 

Credit History -- Applicants must have a credit history that indicates a reasonable ability and willingness to meet obligations as they become due. A credit history reflecting any or all of the following is considered unacceptable credit history:

· 30-days late within the past 12 months

· Late rent payments in the past 2 years

· Bankruptcy, foreclosure, charge-offs of secured debts within the last 3 years

· Outstanding collections may be paid off at close of escrow and noted on the final HUD-1

· Accounts converted to collections in the past 12 months

· Outstanding tax liens or delinquent government debt with no satisfactory arrangement for repayment.

· Any outstanding judgements

MITIGATING FACTORS TO UNACCEPTABLE CREDIT

Adverse credit waivers may be granted for mitigating factors to establish the applicant's intent to good credit. Lenders must document these circumstances which were beyond the borrower's control and have been removed.

· Circumstances for adverse credit were temporary in nature, beyond the applicant's control and have been removed. Examples: increased expenses due to illness and/or medical expenses, injury, death, etc.

· Tri-merge credit reports are required and must be no more than 90 days old at the time the Conditional Commitment is issued

· Applicants must not be delinquent on any debts owed to the Federal Government

· CAIVRs must be checked and documented on the loan application

                APPLICANT ELIGIBILITY

APPLICANT AND INCOME REQUIREMENTS

· Cannot currently own housing

· Does not have to be a first time buyer

· Have the ability to personally occupy the dwelling

· Be a citizen of the United States or be admitted for permanent residency

· Be without adequate down payment funds to secure conventional credit

ELIGIBILITY INCOME

· Eligibility Income - Includes all income (salary, tips, bonus, overtime, alimony, child support, etc.) received by the applicant and co-applicant(s). This income is used to calculate qualifying ratios

· Applicants must have adequate and dependable income

· Qualifying ratios ar 29/41

· Large housing expense increase will be considered with acceptable compensating factors.

· Income to be verified with a written VOE and one month's current paystubs, OR on month's pay stubs and two years of W2's

MODERATE INCOME LIMITS

Applicants for loans may have an income of up to 115% of the median income for the area. Area income limits for this program are below. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories. USDA loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.

                ELIGIBLE RURAL AREAS

 RIVERSIDE AND SAN BERNARDINO COUNTY

COUNTY REQUIREMENTS -- The Guaranteed Rural Housing Loan Program may be used to finance properties located in rural areas. Rural is defined as any town of 25,000 or less that is not adjacent to a large city or that is not part of a continuous urban area...

QUALIFYING AREAS