What are the requirements for the USDA program in Mount Vernon? 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 Mount Vernon.
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 Mount Vernon 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 Mount Vernon.
It has to be a Single Family home in the Mount Vernon 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 Loans in Mount Vernon – Do You Pre-Qualify?
[MUSIC PLAYING] Hello, and welcome toCalHFA's lender training.
My name is Molly Ellis.
Our focus in this video isour VA first mortgage program, basic guidelines,and the best ways to layer closing cost assistanceto benefit your veteran.
First, let's talk aboutour CalHFA VA program.
It's a VA first mortgage withan affordable interest rate.
It has a maximumloan-to-value of 100%, and a maximum combinedloan-to-value of 105%.
The minimum creditscore is 640, and the maximum debt-to-incomeratio is 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 VA loan limit in the countythe property is located allows you to exceed $484,350.
Otherwise, you'd have toadhere to the VA loan limit.
For pricing and thehigh balance fees, please check out the ratepage on CalHFA's website.
A unique feature ofCalHFA's VA program is that it can beused for a borrower whether or not they area first-time homebuyer.
What makes our program so greatis the closing cost assistance.
Layer the CalHFA VA program withour MyHome Assistance Program to allow the veteranto move in with little or no cash out of pocket.
The loan amount for MyHome is3 and 1/2% of the sales price, or the appraised value,whichever is less, which could cover most ofthe veterans closing costs.
Or if the borrower works fora California public school, they can use CalHFA's SchoolTeacher and Employee Assistance Program.
This loan will get them up to4% in closing cost assistance.
You can use only one, eitherMyHome or the school program.
Either way, the interestrate is 3 and 1/4% simple interest withdeferred payments.
Please do not calculate apayment into the borrower's DTI, as it is not required.
Now when we add MyHomeor the school program to the CalHFA VAloan, the veteran does need to be afirst-time homebuyer.
And remember, the definitionof a first-time homebuyer is someone who has not owned andoccupied a principal residence in the past three years.
Both have to be used withthe CalHFA First Mortgage, and must be insecond lien position.
When you're working witha first-time homebuyer, homebuyer education is requiredfor at least one borrower on the loan.
CalHFA does not allow for amanually underwritten loan on a VA loan.
That covers our VAFirst Mortgage Program, and the mortgage assistancethat can be layered with it.
Now let's move on to propertyrequirements and maximum lender origination fees.
The property requirementsfor these programs, for the most part,follow VA 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 home warranty isrequired for first-time home buyers, unless they'repurchasing new construction.
The property cannotexceed five acres, and manufacturedhomes are not allowed.
If the propertymeets VA guidelines for an accessory dwellingunit, then as allowed, you can use the rental income.
Now let's talkabout lender fees.
First, you must be aCalHFA approved lender.
Even though CalHFA usuallycaps the lender fees at 3%, on a VA loan, you'llneed to follow VA requirements, includingallowable and non-allowable fees.
Our rates are at par.
So you have to chargeorigination on these loans.
But with the closingcost assistance from MyHome or theschool program, the borrower willstill have very little out-of-pocket expenses.
If VA allows, you can chargean additional processing fee of $250 for MyHomeor the school program.
You may not charge any otherfees, like origination fee or per diem interest,on the subordinate loan.
We want to help make this easy.
So we have provided sometools to help you process loans with 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-hour workshop tolearn all about CalHFA's phase 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 Agents 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 veterans have a place to call home.
Home Mortgage Lender: Danielle Johnson
I don't want your client's loans.
I don't even want to hear from them.
In fact, I'm gonna show you how to make it so that they never have to hear from me, but they can still get our low rates and our low fees from your preferred lender.
Tt's actually pretty simple.
On your next deal, in fact, on the deal you already have in escrow, get your clients to agree to let you send me these four pieces of information.
I'll put together our rates and fees for their scenario and I'll shoot it over to you.
Then you can take that into your current preferred lender and say, "Hey buddy! Hook my clients up, just this once?" Wait, I said that all wrong.
"Hey buddy! Hook my clients up, Every time!" If they're willing to hook your clients with our low rates and our low fees, every single time, then I don't want their loans.
I don't even want to talk to them.
But if they're either unwilling or unable to do that, then you need to know that we are both willing and able to do that for your clients.
You owe a fiduciary duty to your clients to do what you know is right for them.
If your current lender is willing to do that for them, then stop watching this video.
But if they're unwilling to do that then finish up this video, shoot me a DM on facebook, give me a call, shoot me an email! Whatever it takes, let's get together and do what's right for your clients, every time.