I have had many requests for more information from the Kansas City Area Realtors that need this type of program to get starving potential homeowners into a mortgage.  This will help boost sales and provide a home loan that will benefit a person over the long term.  No adjustable rate, No PMI.

This post is for consumers/homebuyers, Real Estate Professionals and Mortgage Professionals that may not have a good working knowledge of the features and benefits of the US Department of Agriculture’s  Guaranteed Rural Housing program. In the last 14 years I have one of a very few lenders closing these Guaranteed USDA home loans in Johnson County, Kansas.  I have always known that it is one of the most under-utilized mortgage loan programs in the United States.

For purposes of this Posting Most the information below pertains to the Kansas City Market, and most importantly to the Gardner, KS area.  There are links to help you find more information directly from the USDA.

Many Advantages of this home loan are:

•1.      No down payment required.
•2.      No Mortgage Insurance.
•3.      No cash reserves required.
•4.      No seller contribution limit.
•5.      No Prepayment Penalty
•6.      Loan up to 102%* of appraised value allowed…not the lesser of Sale Price or Appraisal
•7.      Loan amount can include closing costs and prepaids up to appraised value.
•8.      No stated maximum loan amount; maximum loan based on repayment ability
•9.      No First Time Homebuyer Requirement
•10.  New and existing homes OK
•11.  Fully amortized 30-year fixed rate loan
•12.  No minimum credit score required…common sense underwriting allowed.
•13.  No minimum cash contribution required from borrower.
•14.  No limit on CLTV when soft second financing.
•15.  No limitation on source of funds for closing costs. No seasoning requirement.
•16.  100% gifted closing cost or down payment assistance is permitted.
•17.  Non-traditional credit may substitute for lack of traditional credit history.
•18.  No derogatory credit explanations required when credit score is 660 or above.
•19.  Rent is not verified with FICO of 660 or more.
•20.  Qualifying ratios of 29%/41%…29% PITI to Income and 41% Total Debt to Income, however standard ratios may be exceeded with documented compensating factors.
•21.  Conventional type loan packaging with only 1 extra form required.
•22.  Competitive rates (set by underwriting lenders) As of 1/19/2008 rates for loans above 85,000 are 5.25%

*Appraisal may be exceeded by amount of Guarantee Fee

Determining if property is in a Rural Development designated rural area:

http://eligibility.sc.egov.usda.gov/ 

Determining if applicant(s) have an acceptable credit history:

•1.      Credit history must indicate a reasonable willingness to meet obligations when due.
•2.      Streamlined credit approval when primary applicant has a middle credit score at 660 or above.
•3.      No minimum credit scores.
•4.      Lack of credit is not derogatory. Alternative credit verifications are allowed, typically 3 lines.
•5.      Lenders make the credit decision.

Income eligibility:

Project the cumulative gross income of all adults in the household.

THE GROSS INCOME LIMITS CAN BE MUCH HIGHER THAN THE ADJUSTED INCOME LIMITS SHOWN IN THIS TABLE

If the projected dependable income exceeds the limits, certain adjustments can be made, such as childcare expenses for children age 12 or younger and paid to someone outside the family. You also can deduct one $480 annual deduction for anyone under 18 or a student who is not one of the applicants. Other deductions may be available (see FL/VI Handbook or RD Instruction 1980-D, www.rurdev.usda.gov/regs

Example: Johnson County 4-person family (2 adults, 2 children) has a gross income of $89610. Child care for the two children age 12 or less is $10,000 annually. Is the threshold income at or below the limit? YES. $89,610 less $10,000 child care less $480 for each child = $79,650.

See the easy to use calculator at: http://eligibility.sc.egov.usda.gov/eligibility  Click on “Single Family Housing” under “Income Eligibility”

Applicant(s) repayment ability:

Ratio limits are 29 front (housing, PITI), 41 back (total debt, MOTI). Rural Development generally allows expanded repayment ratios if recommended by the lender’s underwriter. 31%/43% automatic for dwelling built after 1/1/2000.

Other eligibility criteria:

•1.      Do not own a suitable dwelling.
•2.      Insufficient resources to secure conventional 80% loan without the guarantee.
•3.      U.S. citizen or permanent resident or qualified alien.
•4.      Financed dwelling will be primary residence.

Loan-To-Value (LTV) and Loan Limit:

•1.      102% LTV for the guaranteed first mortgage loan when including the guarantee fee, 100% LTV without the fee included.
•2.      Loan amount can exceed appraised value by the amount of the guarantee fee.
•3.      There is no loan limit

http://www.RonYarbrough.com

Ron Yarbrough
Certified Mortgage Planning Specialist

Last week rates dropped to 5% and below for Streamline Refinances on USDA and Fha home loans.  For a 4 hour period we were able to lock 2 million in volume and we even paid 100% of the closing costs associated with the loan.

Many clients waited and lost out on the no cost option.  There is no reason to catch the absolute bottom of the market if the lender is paying the closing costs.  You can catch a low rate and a few months down the road if rates fall further you can refinance again.

I suggest to everyone that if you want a Certified Mortgage Planning Specialist watch your loan you get on the list.  Take action now and when the next 4 hour window arrives you can be sure to lock in.

http://www.RonYarbrough.com

http://www.Getamortgageplan.com

This post is for consumers/homebuyers, Real Estate Professionals and Mortgage Professionals that may not have a good working knowledge of the features and benefits of the

Many Advantages of this home loan are:1.      No down payment required.2.      No Mortgage Insurance.3.      No cash reserves required.4.      No seller contribution limit.5.      No Prepayment Penalty6.      Loan up to 102%* of appraised value allowed…not the lesser of Sale Price or Appraisal7.      Loan amount can include closing costs and prepaids up to appraised value.8.      No stated maximum loan amount; maximum loan based on repayment ability9.      No First Time Homebuyer Requirement10.  New and existing homes OK11.  Fully amortized 30-year fixed rate loan12.  No minimum credit score required…common sense underwriting allowed.13.  No minimum cash contribution required from borrower.

14.  No limit on CLTV when soft second financing.

15.  No limitation on source of funds for closing costs. No seasoning requirement.16.  100% gifted closing cost or down payment assistance is permitted.17.  Non-traditional credit may substitute for lack of traditional credit history.18.  No derogatory credit explanations required when credit score is 660 or above.19.  Rent is not verified with FICO of 660 or more.20.  Qualifying ratios of 29%/41%…29% PITI to Income and 41% Total Debt to Income, however standard ratios may be exceeded with documented compensating factors.21.  Conventional type loan packaging with only 1 extra form required.22.  Competitive rates (set by underwriting lenders) As of 12/12/2008 rates for loans above 85,000 are 5.50%*Appraisal may be exceeded by amount of Guarantee FeeDetermining if property is in a Rural Development designated rural area: http://eligibility.sc.egov.usda.gov/   Determining if applicant(s) have an acceptable credit history:1.      Credit history must indicate a reasonable willingness to meet obligations when due.2.      Streamlined credit approval when primary applicant has a middle credit score at 620 or above.3.      No minimum credit scores.4.      Lack of credit is not derogatory. Alternative credit verifications are allowed, typically 3 lines.5.      Lenders make the credit decision.Income eligibility:Project the cumulative gross income of all adults in the household.THE GROSS INCOME LIMITS CAN BE MUCH HIGHER THAN THE ADJUSTED INCOME LIMITS SHOWN IN THIS TABLEIf the projected dependable income exceeds the limits, certain adjustments can be made, such as childcare expenses for children age 12 or younger and paid to someone outside the family. You also can deduct one $480 annual deduction for anyone under 18 or a student who is not one of the applicants. Other deductions may be available (see FL/VI Handbook or RD Instruction 1980-D, www.rurdev.usda.gov/regs Example:

55050 62900 70800 78650 84950 91250 97550 103800

See the easy to use calculator at: http://eligibility.sc.egov.usda.gov/eligibility  Click on “Single Family Housing” under “Income Eligibility”Applicant(s) repayment ability:Ratio limits are 29 front (housing, PITI), 41 back (total debt, MOTI). Rural Development generally allows expanded repayment ratios if recommended by the lender’s underwriter. 31%/43% automatic for dwelling built after 1/1/2000.Other eligibility criteria:1.      Do not own a suitable dwelling.2.      Insufficient resources to secure conventional 80% loan without the guarantee.3.     

http://www.RonYarbrough.com

The bulk of the clients I have helped have been in the Gardner, Edgerton, Springhill, Desoto, and Bonner Springs, Kansas Area.  This mortgage does have some income limits but they are very agressive.  For a family of 4 with 2 children under 18 the max income is 79,610 a year per household.  In addition you can get credit for Child Care paid.

What this means is that a home buyer would qualify for a 1923 a month house payment if they were at the maximum Income.  With an interest rate of 5.5% this would purchase a 265,000 home with Zero Down.

Do the math.  There is no better program with a low funding fee of 2% financed into the loan, Veterans don’t even have it as good. 

http://www.RonYarbrough.com

Many of my clients have decided to go ahead with a no cost refinance now to hedge their bets on the interest rates.  No cost refinancing allows a homeowner to refinance, lower their rate and not increase their mortgage balance. 

As a Certified Mortgage Planning Specialist in Gardner, Kansas, I have been helping clients manage their mortgage for over 13 years.  I literally pay all the closing costs and the client takes their savings and either applies it to their principal balance or directs the funds into an investment account.

If rates continue to fall then we have an opportunity to lock in at the lowest rate without paying closing costs multiple times.

Ron Yarbrough

A True no cost refinance does not raise the principal balance on the mortgage. 

Ron Yarbrough

FirsTrust Mortgage in Leawood, KS, will help you get a reverse mortgage without charging the excessive fees that other companies charge.  Mortgage planners adhere to a strict code of ethics. 

For more information about reverse mortgages, call Ron Yarbrough today.

Before the mortgage implosion no doc loans and no ratio loans helped seniors with large retirement account get a traditional mortgage with good great and assets.  Today those assets have declined in value and there are no such loan products.�

I have over 25 million under management now with an average rate of 6.25%  During the 2003 refinance boom my clients were able to take advantage of 30 year fixed rates in the 5% and under range with zero closing costs rolled into the mortgage.

http://www.RonYarbrough.com