Presentation USDA Mortgages For Columbus, Bladen ,And Brunswick Counties of NC and Horry County including the Grand Strand of SC

1. USDA Rural
Housing

2. What is Rural Development?
The Rural Housing Service (RHS) program
provides very-low, low and moderate
income residents with better access to
affordable housing finance options with
little or no down payment or out-of-pocket
costs.

3. What is Rural Development?
• Census-based
• US Department of Agriculture
• Guaranteed against loss by USDA
• Pays lender if borrower defaults
• Funded through the 2% Funding Fee
(which can be financed into the loan!)

4. What is Rural Development?
Two USDA programs are available:
• Direct (low income up to $48,000 for 1-4 ppl)
• Guaranteed (income up to $74,050 for 1-4 ppl)

5. Advantages & Benefits
• Not just for first-time buyers – anyone can
qualify (based on income and property restrictions)
• No loan limits (DTI and income
limitations)
• No down payment
• Can finance 102% of appraised value
• Low Monthly Mortgage Insurance
(0.3% monthly for the life of the loan)

6. Advantages & Benefits (cont.)
• No cash reserves required
• Closing costs can be financed or gifted (gifts are
allowed from relatives who are NOT members of the household)
• Unlimited seller contributions allowed
• Repairs may be financed up to 100% of
appraised value or “as improved” value
• No FHA approval needed
• Can partner with other funding sources, such
as state bond programs like NC Housing

7. Program Features
• Owner-occupied principal residence ONLY
• 30 year fixed rate with competitive rates
• 2/1 buydown permitted (qualify at note rate)
• Borrowers must qualify with both income and
geographic requirements
• Non-occupant co-borrowers are NOT permitted
• Borrower can be permanent or non-permanent
resident alien, and must have a valid SS#
• Cannot own another property (current home must be
sold prior to or concurrently with the new purchase)

8. Other Features
• Streamline documentation with 660 or higher
FICO (rental history waiver – certain derogatory credit waivers allowed)
• Credit waivers with compensating factors
• DTI waivers (above 29/41) with compensating
factors
• Student loans must be included in ratios
• Reservation of funds required
• Appraisals prepared by HUD approved
appraisers can usually eliminate the need for
home inspection

9. Credit History
• Non-traditional credit is allowed (3 to 5 sources of
credit is required).
• Outstanding collection accounts, regardless of
age, that are currently delinquent are NOT
allowed. Collections must be paid (not including
medical collections).
• Any outstanding judgment obtained by the US
in a federal court is NOT allowed.
• Outstanding tax liens, no matter their age, are
unacceptable.
• BK not allowed in the last 36 months.

10. Credit History
If any of these are part of the borrowers credit
history, they will not be able to obtain USDA
financing:
• Judgments caused by nonpayment that is
currently outstanding or has been outstanding
in the past 12 months.
• 2 or more rent/mortgage payments paid 30
days or more past due within the past 3 years.
• Any collections paid in the past 12 months.
Mitigating circumstances may be considered in the event of
inaccurate credit information.

11. Eligible Borrowers
• US citizens
• Non-US citizens, provided the borrower satisfies
all of the following requirements:
• Occupies the property as a permanent
residence; and
• Has a social security number; and
• Is eligible to work in the United States; and
• Is a Qualified Alien with proper
documentation

12. Income Limits
• Use of the eligibility website is suggested to obtain
adjusted eligible income per household
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Eligible deductions may be used for income qualification such as:
• Household members under 18 years of age
• Disabled or handicapped members of household over
18 years of age
• Full-time students 18 or older
• Individuals 62 years of age or older
• Annual childcare expense for children up to 12 years of
age if both parents are employed full-time

13. Income Limits by County
Below is an example of the income limits where Sue Pullen resides. Be sure to
delete the box below and input your local county info. You can find your local
county information by clicking this link:
http://www.rurdev.usda.gov/HSF-Guar_Income_Limits.html
---------- Adjusted Income Limits ----------
County 1Person 2Persons 3Persons 4Persons 5Persons 6Persons 7Persons 8Persons
Brunswick $ 74,050 $ 74,050 $ 74,050 $ 74,050 $ 97,750 $ 97,750 $ 97,750 $ 97,750
Robeson $ 74,050 $ 74,050 $ 74,050 $ 74,050 $ 97,750 $ 97,750 $ 97,750 $ 97,750
Other Area $ 74,050 $ 74,050 $ 74,050 $ 74,050 $ 97,750 $ 97,750 $ 97,750 $ 97,750

14. Property Requirements
• Properties must be located in RD eligible areas
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?Home
• Single family detached
• Condominiums/PUDs warrantable to RD guidelines
• If on a well and septic, must be tested and meet county
requirements
• Termite inspection required – deficiencies must be
corrected
• New construction must have warranty
• No manufactured housing

15. Property Requirements
• Properties cannot be located in a flood zone
(exceptions can be made)
• Leaseholds are allowed if long-term leasing of homesites
is well established local practice
• The value of the site cannot exceed 30% of the total value
of the property (exceptions can be made)
• Property must have dependable water and waste
disposal systems approved by local authorities
• Property must have access to a paved or all-weather
surface street, road or driveway
• Properties with pools typically are not acceptable (the value
of the pool is subtracted from the appraised value)

16. Realtor Benefits
• More buyers qualify to buy your listing
• Quick turn times
• Great for rural listings
• No maximum loan amount
• No down payment required
• Closing costs can be included in the loan
(up to the appraised value)
• Low monthly pmi (a lot cheaper than FHA)
• No "creative financing" needed

17. Resources
• USDA website to access handbook and
Administrative Notices
www.rurdev.usda.gov/regs/regs_toc.html#1980
• USDA National Office website
www.rurdev.usda.gov

18. Russell Smith
Sr Loan Officer
PrimeLending, A PlainsCapital Company
128 Jefferson Street, Whiteville, NC 28472
5917 Oleander Dr, Ste 206, Wilmington, NC 28403
910-914-0655
rdsmith@primelending.com
www.russelldsmith.com