100% UTAH RURAL HOUSING LOAN PRODUCTS:

DIRECT LOW & VERY LOW INCOME LOAN AND GUARANTEED LOAN PRODUCTS

Areas of Cache County, Utah INELIGIBLE for Utah Rural Housing Loans are within Logan City Limits, Providence, Parts of North Logan and River Heights. All other areas are eligible.

A. DIRECT LOW & VERY LOW INCOME LOAN PRODUCT

This loan is referenced in the Federal Register as A Section 502 Loan.

Facts

Applicant eligibility is based on:

1.      Applicant meets basic eligibility criteria, such as citizenship, unable to obtain conventional financing, etc.

2.      Good credit history, with few exceptions granted on a case-by-case basis.

3.      The total adjusted income of all adults living in the home is within the HUD Max Income Limits which pertains to the county where the family will reside.

4.      Applicants are considered very low income when their total adjusted income is below 50% of adjusted median income level and low when the total adjusted income is below 80% of the adjusted median income level for their respective counties.

5.      Applicants have ratios of 29% Principal, Interest, Taxes and Insurance (PITI) and Total Debt (TD) ratio of 41% for very low income applicants, PITI of 33% and TD of 41% for low income applicants.

6.      Very low income families can obtain subsidies to lower their monthly installment.

7.      Meet all other requirements in Handbook 3550 Instruction.

Interest Rates and Terms:

Rates vary depending on the applicants income. If they are eligible for subsidy then the rate is based on an effective rate that can go as low as 1%. Subsidies are subject to recapture.

Unsubsidized rates change periodically.

Normally, loans are 33 years and have a fixed interest rate.

Security Lien Positions:

Rural Housing Service (Rural Development) will subordinate to a leverage lender. Otherwise, we require a first lien position.

Down payment Requirements:

Generally no down payments are required. However, in some instance the applicant is able to make a down payment. If they can obtain a conventional loan by pledging the down payment to the bank, they will not be eligible for our financing.

B. GUARANTEED LOAN 

This is referenced in the Federal Register as Section 502 Guaranteed Loan.

FACTS

Rural Development can guarantee loans submitted only by Guaranteed Approved  Lenders with an active "Lender Participation Agreement."   The lender originates  and services the loan. Loans are generally sold to the secondary market.

Processing steps are:

1.      Potential applicant contacts the lender.

2.      Lender submits a request for a "reservation of funds" to RD local offices.

3.      Lender assembles the loan information from the applicant.

4.      Loan package goes to the approved lender's underwriter.

5.      Lender submits the loan package to Rural Development for review.

6.      Rural Development issues a Conditional Commitment for Guarantee.

7.      Lender is authorized to close the loan according to the conditions of Rural Development and the lenders underwriter.

8.      Lender submits evidence of closing and 1.5% guarantee fee. The fee is nonrefundable and 1.5% of the amount of the loan.

9.      Rural Development issue's the LOAN NOTE GUARANTEE.

Applicant Eligibility:

1.      The total adjusted annual income must be within the HUD limits that pertain to the county where the family will reside. Incomes must be within 60% and 115% of the median income.

2.      Principal, Interest, Taxes and Insurance (PITI) ratios not to exceed 29% and Total Debt ratio not to exceed 41% of gross monthly income.

3.      Applicant is not able to obtain the loan with out the guarantee.

4.      Applicant must have a good credit history with few exceptions on a case by case basis.

5.      Property must be in an area defined as "Rural".

6.      Meet all other requirements outlined in 1980-D Instructions.

Rates and terms:

NO Adjustable Rate Mortgages.

Rates are negotiable between the applicant and lender. However, the interest rate cannot exceed the "higher" of the lender's published rate for VA first mortgage loans or Fannie Mae rate of 6/10's of 1% on a 90 day delivery.

Terms are, generally 30 years.

Maximum Loan Amounts:

The applicants repayment ability determines the maximum loan amount.

*All information deemed reliable and subject to change without notice.