USDA Loan Program Flashcards
What is a USDA/502 Loan Program
A Rural Housing Service loan (RHS) is a guaranteed loan that is a government insured up to 100% LTV purchase money loan.
These types of loans are only available for rural areas and towns up to twenty thousand (20,000) in population that are located in low-to-moderate income areas and are serviced by direct lenders.
The RHS loan program administration is from the USDA. Applicants for these loans may have an income up to 115% of the median income for the area.
Funds can be used for a variety of purposes, including repairs, building, renovating or even relocating the home.
What is the Qualifying Debit to Income Ratios (DTI) for an USDA/502 Loan Program?
29%/41%
29% Housing Expense
Ratio (HER) Front End
Ratio
41% Total Debt to income ratio (TOR)
Back End Ratio
What is the qualifying/down payment minimum Investment for purchase for an USDA/5002 Loan program?
0%
What is the seller’s allowable concession on a USDA/5002 Loan Program?
6%
Seller Concessions/Seller Closing Costs/Seller
Contribute on the LOWER of the APPRAISAL or
PURCHASE PRICE
What is the late fee for an USDA/5002 Loan Program?
4% P&I
How many days must an occupant certify they will occupy the property?
60 Days
Does the USDA/5002 Loan program use an approved appraisor?
NO
What two types of mortgage insurance premiums does the USDA/5002 Program Loan use?
NO PMI
How much is the upfront MIP for USDA/5002 Loan Program?
Yes
How much does the USDA/5002 Loan Program insure the Mortgage Loan?
100%
Is it ok for a down payments to come a gift fund
Gift funds can be used as the down payment. A valid gift letter is requested of the provider of the gift that shows there is no intent for the gift to be repaid
Is the USDA/5002 Loan assumable?
Yes
Are there pre payment penalies on a USDA/5002 program?
No Prepayment Penalty
