Date: May 2, 2013

USDA Loan Calculations of Deferred & Income Based Student Loan Payments

For potential homebuyers with student loans that are either in a deferred payment status or being paid back through an income based repayment program, the treatment of this liability needs to be considered.
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Date: April 15, 2013

640 Middle Credit Score – Extremely Important

USDA Rural Loans theoretically aren't credit score driven. Borrowers with no credit scores are even eligible for the loan. When evaluating a borrower's credit, the USDA Underwriter is able to issue a "credit waiver" on all minor derogatory credit provided the borrower has a minimum 640 middle credit score.
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Date: April 1, 2013

USDA Loan's Mortgage Insurance - 68% Less Than a Comparable FHA Loan

Effective April 1, 2013 USDA Loans will continue to offer an ever greater competitive advantage over a comparable FHA Loan. On April 1, 2013 the monthly mortgage insurance premium will increase based on an annual factorial from 125 basis points to 135 basis points. This compares to the USDA Rural Loan program which charges an Annual Fee of 40 basis points.
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Date: March 27, 2013

USDA Rural Loan – Implantation of 2010 Census Data for Rural Development Program

On March 26, 2013 the President signed the "Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2013". This Act delays transition based on the 2010 census data used to determine eligible areas for the USDA Rural Loan until the expiration of the FY 2013 Appropriations Act on September 30, 2013.
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Date: February 21, 2013

USDA Loan - Determine Maximum Monthly Mortgage Payment

One of the most frequent questions that come from perspective homebuyers is "How Much House Can I Afford?" Determining this number is based on calculating what are known as the borrower’s Debt-To-Income (DTI) ratios. The established maximum DTI ratio used for a USDA Loan is based on a the monthly mortgage payment not exceeding 29% of the gross monthly income and total debt, including the new monthly mortgage payment, not exceeding 41% of the gross monthly income.
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Date: December 18, 2012

USDA Loan Financing – For Sale By Owner (FSBO) Transactions

For Sale By Owner or FSBO transactions are real state sales transactions that don't involve a Real Estate Listing Agent when selling a house. The theoretical benefit of a FSBO transaction is that that the buyer and seller can complete a sales transaction while minimizing the payout of a sales commission to a Realtor, which should allow the seller to more aggressively set the sales price of the house.
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Date: October 28, 2012

USDA Loan Financing Testing Requirements - Water Test, Septic Certification, and Pest Inspection

Determining what type of tests is required when obtaining a USDA Purchase Loan is based on Rural Development Guidelines, appraiser comments, and lender overlays.
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Date: October 1, 2012

USDA Upfront Guarantee Fee – Fiscal Year 2013 Change Update

Effective October 1, 2012 the USDA Guarantee Loan program will increase the percent charged on the Annual Fee to .4% of the outstanding loan amount from .3% of the outstanding loan amount. The upfront 2.00% fee charged on all USDA Purchase transactions will remain unchanged. The upfront fee on USDA Refinance transactions will increase from 1.50% to 2.00%
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Date: September 3, 2012

USDA Loan - Lease To Own Financing

Lease to own financing is a popular tool for credit challenged homebuyers, which allow a potential homebuyer to occupy a property with the intention of purchasing the house at a predetermined date and purchase price in the future. The assumption of lease to own financing is that the potential homeowner can fix their credit challenges, which initially precluded them from purchasing their house, while they occupy the property.
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Date: August 19, 2012

Can I Use a USDA Loan To Purchase a House When I Already Own a House?

The USDA Rural Loan is designed to assist moderate income households, in rural communities, purchase a house. The USDA Loan assumes a very conservative perspective on financing homeowners who already own a home, unless the borrower can prove that the current home is not adequate or suitable for the borrower's needs.
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Date: June 28, 2012

Subsidy Recapture - Not On the USDA Guarantee Rural Loan

One of the most common misconceptions of the USDA Guaranteed Rural Loan Program is that the U.S. Government will take a portion of the equity gain away when the homeowner sells or refinances their mortgage.
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Date: May 13, 2012

New Home Construction - USDA Loan Financing

Perspective homeowners considering new home construction can use a USDA Guarantee Loan to purchase the house provided the loan is being used just for the end financing and not as a construction loan.
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Date: February 1, 2012

USDA Financing Post Bankruptcy, Foreclosure, or Short Sale

The USDA Rural Loan program requires a minimum of three years from the date of a bankruptcy, foreclosure, or shorts sale prior to the borrower being eligible for a USDA Loan. For both a Chapter 7 and 13 bankruptcies the borrower must allow three years from the discharge date prior to submitting a new loan request. If the bankruptcy included a property, whether a primary residence or investment property, the soonest a new loan can be obtained is based on guidelines that address short sales and foreclosures.
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Date: December 15, 2011

USDA Income Calculations – Income Eligibility vs. Qualifying Income

USDA Loans require that the borrower's income meet both Income Eligibility and Income Qualifying requirements. Income Eligibility is the income used to determine whether the household income exceeds the allowable limit, specific to the particular county and state in which the property is located and the size of the household. Income Qualifying is the income used to determine whether the income is large enough to support the loan request.
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Date: November 15, 2011

Can't Qualify For a USDA Rural Loan – Next Best Solution

Often USDA Rural Loan applicants will not qualify for a USDA Loan for various reasons including income that exceeds USDA guidelines, property not being located in an eligible area, owning another home, excessive debt-to-income ratios, condition of the house, etc.
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Date: October 1, 2011

USDA Upfront Guarantee Fee – Fiscal Year 2012 Change Update

Effective October 1, 2011 the USDA Guarantee Loan Program will decrease the upfront fee charged on all USDA Purchase transactions from 3.50% to 2.00%. The upfront fee on USDA Refinance transactions will decrease from 3.50% to 1.50%. In addition, the USDA Guarantee Loan program will start to charge an Annual Fee of .3% of the outstanding loan amount that will be paid for the life of the loan.
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Date: August 11, 2011

USDA Rural Loan – Paying For the Appraisal Report

When purchasing a house a homebuyer must pay for an appraisal report upfront using their own funds. There are various scenarios in which a homebuyer can get the cost of their appraisal report returned to them at settlement.
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Date: July 15, 2011

USDA Loans - Verification of Rent

One of the most important aspects of qualifying a new homeowner for a USDA Loan is determining if there is a history of making a rental housing payment. This helps the Underwriter evaluating the loan to determine the likelihood that the new homeowner will be able to make their mortgage payment, based on a history of making an on-going monthly housing payment.
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June 28, 2011

USDA 3.50% Guarantee Fee

One of the most frequent questions that come up when discussing the USDA Loan program is the 3.50% fee that appears on the good faith estimate. USDA Loan are a "budget neutral" loan program offered through the U.S. Department of Agriculture.
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June 6, 2011

USDA Loans and Previous Foreclosure

As the first wave of homeowners that were impacted by the foreclosure crises in 2006 and 2007 start reentering the housing market special attention needs to be given to when these borrowers are eligible for their new loan. USDA Loans guidelines allow a perspective borrower to have had a foreclosure as recently as three years prior to the new loan application being taken.
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May 19, 2011

When a USDA Loan Amount Can Be Greater Than the Purchase Price

One of the little known facts of the USDA Loan program is that, under certain circumstances, the closing costs can be included in the final loan amount. This option is available when the appraised value exceeds the purchase price, then this variance can be used to cover the closing related costs of the loan. No other loan program on the market allows for this optional increase.
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May 1, 2011

USDA Loans and Swimming Pools

For years properties that included an in-ground swimming pool were deemed ineligible for a USDA Rural Development Loan. This guideline has recently been loosened to include properties with an in-ground pool provided that the USDA Loans isn't used to finance the portion of the property's value attributed to the pool.
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April 18, 2011

The Affordability Gap Between USDA Loans and FHA Loans Widens

On April 18, 2011 FHA increased the Mortgage Insurance or MI on all FHA insured loans .25% across the board. This represents the second increase since October 2010, in which the ratio used to calculate FHA monthly mortgage insurance premiums has more than doubled from .50 to 1.15.
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February 1, 2011

Completion of the 2010 Census Impacts USDA Eligible Areas

USDA Loans are available in rural areas and suburban communities with population densities of 10,000 people or less per census track. With the completion of the 2010 Census, some areas that were once considered eligible based on USDA Rural Development Guidelines, have been updated to reflect population density increases and are no longer eligible for a USDA Loan.
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January 7, 2011

Understanding the USDA Rural Development Loan Program in Less Than Five Minutes

USDA Loan Program is a fantastic no money down, 100% financed USDA loan program that is ideal for certain homes and certain buyer(s). Trying to determine the areas and buyers that are eligible for the USDA Loan Program is a constant source of confusion for less experienced Realtors, Lenders, and homebuyers.
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December 29, 2010

USDA and VA – The "Secret" No Money Down Loan Programs

Currently there are only two loan programs offered throughout the United States that allow a homebuyer to purchase their home with no down payment and no out-of-pocket costs provided the seller pays for the closing costs and escrows. The two loan programs are VA and USDA. The VA loan program requires that the borrower have earned their VA Eligibility by serving in the military and/or reserves.
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December 20, 2010

Why USDA Rural Loans Are Slowly Getting More Popular?

As the only no money down loan program available in the United States that is not restricted to just current or former military service personal it is hard to understand why the USDA Rural Development Loan Programs haven't become the lead loan program throughout rural America. To understand the relatively slow rate of adoption of the USDA Program one must first understand the motivations and requirements of the parties to the transaction.
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December 16, 2010

Credit Scores and the USDA Rural Development Loan Program

The USDA Loan Program is by far the most credit score friendly loan program currently available. While USDA is willing to work with scores lower than 640 most lenders won't. Thus, pragmatically the minimum credit score required by USDA is 640.
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