Updating guidelines

With this issue in mind, Lenders are reminded that borrowers cannot make any direct or indirect contribution to the buydown account.

Borrowers may pay points in connection with the Lender’s establishment of a 2/1 buydown loan.

Cash-On-Hand – Cash-on-hand is typically not an acceptable source of funds for closing.

However, it may be acceptable if the following can be documented: The lender must verify that funds have been transferred to the borrower’s account and show documentation of the transfer of the gift funds from the donor’s account; for example, by obtaining the following documents: (i) a copy of the donor’s canceled check or withdrawal slip and (ii) the borrower’s deposit slip, etc.

As Rural Development will require a final inspection once the work is completed, please include this expense as part of the escrow holdback.

The maximum interest rate for the Rural Development Guaranteed Rural Housing Program is defined as the FNMA 90-day actual-actual yield requirements plus 60 basis points, rounded up to the nearest quarter percent.

In order to qualify for this option, a borrower’s median credit score must be 660 or above.

When utilizing this option, Lenders must remember to include the unsecured debt in the total debt calculations, and should indicate on the “Source of Downpayment, Settlement Changes, and/or Subordinate Financing” Section of the FNMA 1003 (Uniform Residential Loan Application) the amount of the unsecured funds.

Note: All supporting gift documentation (other than the gift letter) is no longer required if the entire gift is going toward closing costs/prepaids (any amount), or being used to pay-off debt of

Note: All supporting gift documentation (other than the gift letter) is no longer required if the entire gift is going toward closing costs/prepaids (any amount), or being used to pay-off debt of $1,000 or less.

Unless the deficiency is a significant item that negatively impacts the safety or livability of the dwelling, loan closing need not be delayed.

For those deficiencies that can be corrected post-closing, the USDA loan will require, in addition to our standard closing items: Rural Development requires all repairs to be completed prior to their issuance of the final Loan Note Guarantee (Rural Development Form 1980-17).

In those cases, the following are acceptable sources for verification of funds.

If the date of the borrower’s most recent statement is more than 45 days earlier than the date of the borrower’s application, the borrower must supply a supplemental statement – the lender may accept any generated forms (such as deposit or withdrawal slips) that show a machine-printed account number, balance, and date.

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Note: All supporting gift documentation (other than the gift letter) is no longer required if the entire gift is going toward closing costs/prepaids (any amount), or being used to pay-off debt of $1,000 or less.Unless the deficiency is a significant item that negatively impacts the safety or livability of the dwelling, loan closing need not be delayed.For those deficiencies that can be corrected post-closing, the USDA loan will require, in addition to our standard closing items: Rural Development requires all repairs to be completed prior to their issuance of the final Loan Note Guarantee (Rural Development Form 1980-17).In those cases, the following are acceptable sources for verification of funds.If the date of the borrower’s most recent statement is more than 45 days earlier than the date of the borrower’s application, the borrower must supply a supplemental statement – the lender may accept any generated forms (such as deposit or withdrawal slips) that show a machine-printed account number, balance, and date.

,000 or less.Unless the deficiency is a significant item that negatively impacts the safety or livability of the dwelling, loan closing need not be delayed.For those deficiencies that can be corrected post-closing, the USDA loan will require, in addition to our standard closing items: Rural Development requires all repairs to be completed prior to their issuance of the final Loan Note Guarantee (Rural Development Form 1980-17).In those cases, the following are acceptable sources for verification of funds.If the date of the borrower’s most recent statement is more than 45 days earlier than the date of the borrower’s application, the borrower must supply a supplemental statement – the lender may accept any generated forms (such as deposit or withdrawal slips) that show a machine-printed account number, balance, and date.

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