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Mar 15

USDA Loan Update

usda-home-in-yuma-azUSDA Rural Development is making changes!  Effective Wednesday, March 9, 2016, the final rule for 7 CFR Part 3555 and the revised technical handbook, HB-1-3555, will apply for all Rural Development Conditional Commitments issued by USDA.

The revisions include many positive changes that will help potential USDA homebuyers qualify for financing.  Here are a few of the updates:

  • Relaxed guidelines about last minute credit report updates.
  • Discount points are now an eligible use of proceeds for moderate income borrowers and can be financed
  • Clarification of the eligibility of conventional credit available to the borrower
  • Various income clarifications (qualifying income, interest/dividend income, withdrawals from businesses, etc.)
  • Social Security benefits are treated as likely to continue unless the benefit verification letter specifically states otherwise
  • Two tradelines instead of three are required for credit score validation (this helps for home buyers with limited credit)
  • Only 12 months required after a Chapter 13 bankruptcy
  • Applicants that are divorced with a short sale may be eligible
  • New documentation guidance for previous mortgage liabilities (including divorces)
  • Property flips requires lenders to “ensure any recently sold property’s value is strongly supported..”

There are many other changes to the Guaranteed Rural Housing program.  USDA Rural Development has released a revisions document that details the changes, chapter by chapter, to the Handbook. The summary section on the right side of this document is a nice re-cap.

usda-home-loan-mortgage-yuma-azFor more information about USDA loans, see 5 Easy Steps to Buying a Home with a USDA Loan in Yuma AZ or our USDA Loan Program Page.

 

Find Out More!






 

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