For our real estate agents

Has the market got you Has the market got you down?down?

•Fewer buyers•Fewer loan programs•Less homes being sold

We have the solution for you!

Just KIDDING!Just KIDDING!

What you do need are What you do need are programs that will programs that will help you sell more help you sell more homes, correct?homes, correct?

What if I told you there What if I told you there was a conventional loan was a conventional loan

that had…that had… NONO down payment down payment NONO monthly PMI, monthly PMI, Allows the seller to pay all reasonable Allows the seller to pay all reasonable

closing cost and pre-paid expensesclosing cost and pre-paid expenses NONO out of pocket for the buyer out of pocket for the buyer NOTNOT a first time home buyer program a first time home buyer program NoNo reserves needed reserves needed

What would you think?What would you think?

You wouldn’t believe me, would You wouldn’t believe me, would you?you?

Yes, I am a bit skeptical.

What if I also told you What if I also told you that…that…

This particular mortgage also has a This particular mortgage also has a unique feature that all reasonable unique feature that all reasonable closing costs and prepaid expenses closing costs and prepaid expenses can be rolled into the mortgage can be rolled into the mortgage WITHOUTWITHOUT the seller actually paying the seller actually paying the costs. the costs. (as long as the house appraises for the increased loan (as long as the house appraises for the increased loan

amount)amount)

Now your thinking….Now your thinking….

Where have you been? Didn’t you know there are no more loan programs out there?

BUT There is a loan just BUT There is a loan just like that!like that!

It is the USDA rural development It is the USDA rural development loan. loan. It is area specific and income It is area specific and income limited, so it is important that you limited, so it is important that you work with a lender that is very work with a lender that is very knowledgeable with the loan knowledgeable with the loan guidelinesguidelines! !

That would be US! That would be US!

Just think…Just think…

……how useful this loan would be in how useful this loan would be in negotiations of contracts. negotiations of contracts.

Will get more of these: Will get more of these:

Now your asking:Now your asking:

What is USDA and how does it work?What is USDA and how does it work?

I am glad you asked…as we are I am glad you asked…as we are going to walk you through some of going to walk you through some of the parameters of USDA loans. the parameters of USDA loans. Buckle in and enjoy the ride!Buckle in and enjoy the ride!

USDA RURAL DEVELOPMEN

T

WHAT IS RURAL WHAT IS RURAL DEVELOMENT?DEVELOMENT?

Census-basedCensus-based

US Department of AgricultureUS Department of Agriculture

Guaranteed against loss by USDAGuaranteed against loss by USDA

Pays lender if borrower defaultsPays lender if borrower defaults

WHO CAN DO USDA WHO CAN DO USDA LOANS?LOANS?

Approved lender with HUD, VA, Approved lender with HUD, VA,

Fannie Mae or Freddie MacFannie Mae or Freddie Mac

State Housing Agency State Housing Agency

Farm Credit ServiceFarm Credit Service

IT’S THE IT’S THE GOVERNMENT!GOVERNMENT!

Pays for itself – doesn’t use taxpayer Pays for itself – doesn’t use taxpayer

moneymoney

Funded through the 3.5% Funding Funded through the 3.5% Funding

Fee Fee

(which can be financed into the (which can be financed into the

loan!)loan!)

QUALIFYINGQUALIFYING Debt to Income Ratios = 29/41Debt to Income Ratios = 29/41 Debt to Income Ratios = 31/43 Debt to Income Ratios = 31/43

(for homes built after January, 2001)(for homes built after January, 2001) Credit waiver for scores above 620! We can refer the Credit waiver for scores above 620! We can refer the

borrower to a reputable credit repair company whom can borrower to a reputable credit repair company whom can help if the credit score is low today. This will get the help if the credit score is low today. This will get the borrower “homebuyer ready”!borrower “homebuyer ready”!

Can go higher on DTI w/compensating factors: Can go higher on DTI w/compensating factors: 660+ Credit Score660+ Credit Score Zero or very little payment shockZero or very little payment shock 2+ years continuous employment at same job2+ years continuous employment at same job

Rental/Housing history for 12 months required if credit score Rental/Housing history for 12 months required if credit score 639 or less (cancelled checks or third party management 639 or less (cancelled checks or third party management company); if 640 or higher, not requiredcompany); if 640 or higher, not required

GEOGRAPHICAL/INCOME GEOGRAPHICAL/INCOME QUALIFICATIONSQUALIFICATIONS

Most of Iowa is geographically eligible. Only 20 counties Most of Iowa is geographically eligible. Only 20 counties contain ineligible areas! They are as follows:contain ineligible areas! They are as follows:

Black Hawk, Cerro Gordo, Clinton, Dallas, Des Moines, Dubuque, Johnson, Linn, Marshall, Mills, Muscatine, Plymouth, Polk, Pottawattamie, Scott, Story, Wapello, Warren, Webster, and Black Hawk, Cerro Gordo, Clinton, Dallas, Des Moines, Dubuque, Johnson, Linn, Marshall, Mills, Muscatine, Plymouth, Polk, Pottawattamie, Scott, Story, Wapello, Warren, Webster, and WoodburyWoodbury..

Loans are available in towns/cities up to a population of 20,000.Loans are available in towns/cities up to a population of 20,000.

Total household income must be accounted for even if Total household income must be accounted for even if residents of the home are not on the mortgage note.residents of the home are not on the mortgage note.Income limits are based off of the number of people residing in the household. The ** average ** county with 1-4 people in household will Income limits are based off of the number of people residing in the household. The ** average ** county with 1-4 people in household will be restricted to a max of $74,050 while 5-8 people will be maxed at $97,750.be restricted to a max of $74,050 while 5-8 people will be maxed at $97,750.

The counties of Benton, Bremer, Dallas, Guthrie, Harrison, Iowa, Johnson, Linn, Madison, Marion, Mills, Plymouth, Polk, Pottawattamie, The counties of Benton, Bremer, Dallas, Guthrie, Harrison, Iowa, Johnson, Linn, Madison, Marion, Mills, Plymouth, Polk, Pottawattamie, Story, and Warren allow higher max income levels. See handout for these.Story, and Warren allow higher max income levels. See handout for these.

Deductions can be made for children under the age of 18, elderly family members in the home, and child care expenses for children under Deductions can be made for children under the age of 18, elderly family members in the home, and child care expenses for children under the age of 12.the age of 12.

..

BENEFITS TO BUYERSBENEFITS TO BUYERS

Can finance 103.5% of appraised value, Can finance 103.5% of appraised value, without getting cash back at closing (can without getting cash back at closing (can get EMD, but no more)get EMD, but no more)

No Monthly Mortgage InsuranceNo Monthly Mortgage Insurance 30-Year fixed rate with very competitive 30-Year fixed rate with very competitive

ratesrates No loan limits (DTI/income limitations)No loan limits (DTI/income limitations) Closing costs can be financedClosing costs can be financed Unlimited gift or seller contributionsUnlimited gift or seller contributions No reserves requiredNo reserves required

Sales Price: Sales Price: Appraisal: Appraisal: Seller Seller Paying:Paying:EMD:EMD:Closing/PrepClosing/Prepaidsaids3.5%Funding3.5%FundingFee:Fee:

$100,000$105,000$0 Closing Costs$500$3,000/$2,000$3,807

Can Finance: $108,807 and get $500 EMD back

Example Loan

QUESTIONQUESTIONS?S?Call your friends

at Allied Home Mortgage

Corporation at

319-447-1143