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Guaranteed Residential Loans}

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Frequently Asked Questions         Advantages of this loan

The application is made at a participating lender’s office. They process and close the loan.
The lenders are able to offer this "no down payment" loan because this Agency guarantees the loan. Mortgage insurance is not required.

Purpose

	“Purchase a new or existing home including on-site built, modular, town home, and condominium.  Condominium in new developments may have certain restrictions.  Consult your lender.  New manufactured homes may be financed but must be purchased from Rural Development approved dealer-contractor.”
	Purchase land and contract to build a home.
	Refinance an existing Agency guaranteed loan, including: unpaid principal; interest; and closing costs.
	Refinance an existing Agency direct loan (where you obtained your original loan directly from the Agency), including: unpaid principal; interest; and closing costs. Any subsidy due may be deferred or financed in the loan.

Refinancing loans cannot include payoff of debts other than the original real estate loan. No cash back at closing.

Eligibility

	Typically, must not own a dwelling in the local commuting area or own one which is not structurally sound or functionally adequate.
	Be a citizen. Non-citizens must have documentation specifically listed in the handbook posted on the Loan Origination link for lenders.
	Have legal capacity to incur the loan.
	Occupy the new home on a permanent basis.
	For more information visit this link: Loan Origination

A credit score greater than 620 is preferred. If your credit score is less than 580, you cannot have:

	Foreclosure in past 36 months.
	Bankruptcy discharged within 36 months.
	More than one 30 day late on consumer debts in past 12 months.
	Accounts converted to collections within past 12 months.
	Tax liens or delinquent government debts (including student loans).
	Judgments outstanding in past 12 months.
	Outstanding collection accounts.
	Two or more late rent payments in past 12 months.

Income Limit

Your adjusted gross annual household income must be less than the “mod.inc-guar.loan” limits for Florida and the Virgin Islands in this chart: Income Chart

If your gross household income is over the stated limit, certain adjustments may be allowed.
Gross household income is the total income, before any deductions, of all adults who are members of your household.

Are you in the "low" income range or less?

The intent of the guaranteed loan program is to assist moderate income families who can afford market interest rates. If your income is in the "low" range or less, you should consider the Agency’s direct loan program. 

Property Location

Check eligibility of your proposed home eligible areas. (Click on the link "Property Eligibility" and follow the directions. The shaded areas are NOT eligible.)

The property you wish to purchase must be located in an area deemed "eligible". 
(Generally the community must be less than 10,000 persons.) Collier and Lake counties are exceptions.
The counties of Broward, Pinellas and Monroe are not eligible.
Duval County is mostly ineligible except a small area around the town of Baldwin.

Repayment ability (ratios)

Your monthly house payment, taxes, and insurance should not exceed 29% of the gross monthly income of the person(s) signing the promissory note.
Your total monthly payments including the house payment, taxes, insurance and other debt payments should not exceed 41% of the gross monthly income. Your lender may consider a higher ratio if you have excellent credit and minimum increase in your housing expense.
Click Here for an example of repayment ratios.

Restrictions

	Small farm acreages or ranchettes are not financed. Properties must be residential only.
	No refinancing of consumer debts such as credit cards or car loans.
	No duplexes.
	No existing manufactured homes (modular homes are permitted).
	New construction in flood prone areas is not permitted.
	Property should be located on a paved or very good all-weather road.
	Existing properties must meet HUD standards. Contact the your lender or the local RHS office before contracting for an old dwelling. Repairs may be financed into the loan.
	Other restrictions may apply.

Maximum Loan
The loan does not have a set monetary limit. The applicant’s repayment ability restricts the amount of loan. The loan can exceed the appraisal by the amount of the Agency's guarantee fee.
The property should not be considered above modest in the community.

Home Buyer Education
First time home buyers are expected to complete a home buyers education course. Many lenders offer a course or have home study materials available to you. Home buyer education is offered by the many county SHIP (State Housing Initiatives Program) coordinators. Also visit this HUD link to find a class:  http://www.hud.gov/local/fl/homeownership/buyingprgms.cfm

Find a Lender
Apply for the loan at the mortgage lending department of your personal lender or any mortgage lender in your neighborhood. 
Ask for the “USDA Rural Development Guaranteed Housing Loan”. 
Find an approved lender in your county by contacting
USDA Rural Development Office.

 OTHER FINANCIAL ASSISTANCE FOR CLOSING COSTS
You may qualify for assistance from the “SHIPP” program administered by your local county government. Contact the housing department and ask for the “SHIPP Coordinator”. If one is not available, ask for the person handling the “SHIPP” program. Most FL counties have grant or forgivable loan assistance for paying the closing costs

Other useful sites:
^{Fannie Mae http:// www.fanniemae.com
Freddie Mac http://www.freddiemac.com
VA  http://www.va.gov
HUD http://www.hud.gov}