Frequently Asked Questions (Builders)

 

Q.      What is the maximum loan amount or purchase price limit?

A.      None. However, it is limited by the appraised value and repayment ability.

 

Q.      Can my customers obtain Rural Development financing on spec homes?

A.      Yes.  Check with your local or state Rural Development staff for documentation requirements.  

 

Q.      Is mortgage insurance required?

A.      No.  The Agency charges a one-time guarantee fee that can be financed.

 

Q.      How much time should we allow for closing the transaction? 

A.      Upon receipt of a complete loan package from an approved lender, our review process takes 24 to 48 hours.  The loans close within the typical time frame allowed for conventional financing.

 

 Q.     Is there a minimum credit score?

A.     No.  However, the approved lender will expect an adequate credit history to demonstrate the customer is creditworthy.

 

Q.     What are the allowed loan purposes?

A.     The loan may include all typical costs associated with the land purchase, construction, and closing the loan.

 

Q.      What are the options for financing a custom home?

A.      Lenders can process either a construction-perm loan or an end loan.

 

Q.      Can closing costs be financed in the loan?

A.      Yes, if the appraised value exceeds the contract amount.

 

Q.      I work with a local mortgage broker.  Can they process the loan? 

A.      Yes.  However, only the Agency approved underwriting lender can submit the application to Rural Development. 

 

Q.     Are seller concessions allowed?

A.     Yes.  The Rural Development does not restrict the amount of seller concessions.

 

Q.    What types of new homes can be financed?

A.    All typical types for the area including stick-built, modular, manufactured,  condominiums, and town-homes.