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6205
RURAL DEVELOPMENT (RD)
GUARANTEED RURAL HOUSING (GRH) PRODUCT MATRIX
PROGRAM BENEFITS
Financing 102% financing based on appraised value
Term 30-year fixed
Mortgage insurance No monthly mortgage insurance. One-time guarantee fee of 2.00%
Payment reserves No payment reserve requirements
Downpayment No downpayment
First-time homebuyer No First-time homebuyer requirement
Seller concessions 6%
Gifts 100% gifting permitted. Donor must be disinterested third party.
INCOME AND RATIOS
Ratios 29/41 – exceptions encouraged with compensating factors and RD
concurrence
Non-occupant Coborrower
Non-occupant co-borrowers not permitted unless approved by RD
Installment debt Include all installment debt greater than 6 months
Primary income Two-year history
Self-employment Two-years 1040s and P&L
Alimony/child support 12-month history, with proof of 3 years continuance
Part-time, Over-time &
Bonus
12-month history
Disability benefits Benefits letter , 3 years continuance and gross up 125%
SSI benefits Awards letter or 2 months bank stmts, 3 years continuance and gross up
125%
Salary increases Salary increases with 30 days of the first payment due date are
acceptable
Maximum income Use RD Moderate Income Limits http://eligibility.sc.egov.usda.gov
CREDIT
Credit score Minimum FICO score 620
Late payments 1 X 30 permitted in last 12 months with explanations – Exceptions may
be granted if your borrowers have 620 or greater middle credit scores
Bankruptcy/Foreclosure Chapter 7 and 13 must be discharged for 3 years.
Collections Accounts cannot have been placed in collection status within the last
12-months.
Judgments Must be paid off for at least 12 months.
Verification of Rent A VOR is required for the most recent 12 months rent.
Previous Housing
Payment
Not required
Non-traditional credit Acceptable if no credit is available and borrower has no derogatory
credit history. Alt trades must be VOR (management company or
cancelled checks, no private party VOR for zero scores), electric, gas,
phone, etc.
Credit report RMCR or Tri-Bureau merged
Homebuyer education Case by case basis or when required by RD
DW 0109 Page 2 of 2
RURAL DEVELOPMENT (RD)
GUARANTEED RURAL HOUSING (GRH) PRODUCT MATRIX (Cont.)
FUNDS FOR CLOSING
Closing costs All closing costs may be financed, except discount points unless
borrower is below the RD low income limit, then discount points may be
financed
Seller concessions All closing costs and prepaids may be paid by seller concessions
Gifting 100% gifting acceptable from disinterested third party
Cash contribution No minimum cash contribution from borrowers
Unsecured funds Borrowing of unsecured funds allowed with 660 credit score
PROPERTY REQUIREMENTS
Eligible areas Property must be located in a RD eligible area
http://eligibility.sc.egov.usda.gov
Other Real Estate Owned Borrowers must not own adequate housing.
Occupancy Primary residence only
Property Type Single family or RD eligible condo/PUD
Swimming pools No in-ground swimming pools (above ground permitted)
Thermal Certification Thermal insulation certifications are no longer required!
Home Inspection
Adequacy Certification
Homes must be certified as meeting HUD handbook guidelines 4150.2
& 4905.1. Some states may require specific inspection forms.
Termite inspection All areas as required by RD
Well/Septic inspections 100% required - Septic inspection may be completed by FHA roster
appraiser, Well test must be completed by state certified lab.
Repairs 100% of repairs may be financed based on as-improved value. If work is
not complete prior to closing an escrow hold back may be established at
2X of the repair cost. (more rules apply, please contact your AE for
more details)
Appraisal Appraiser must be on an FHA roster and Fannie/Freddie appraisal form
must be used.
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