With the Rural Development being one of the Popular 100% Loan Programs now, I wanted to share just a few ket points that are vital that all Realtors and Customers must keep in Mind.
- Acreage limitation is no more than 5 acres
- For our Area, Springfield, Battlefield, Brookline and Nixa are not allowed to use the Program
- All areas outside of these are fine. Just make sure to contact the Local RD Office to confirm that the address is fine to proceed.
- If the Property is on Private Well and Septic, RD WILL require that a Well and Septic Test must be performed in addtion to a Termite Inspection.
- Some common oversights that can be easily overlooked are the Income Guidelines for the area and please make sure that the Front and Backend Ratios are not exceeded.
- Payment Shock is another item that must not be overlooked.
- RD does allow the Lender to submit an Exception form for Items 5 and 6 if they are needed .
- Repair items that need to be Escrowed are allowed for the RD Program. This is a great back up program to use if the Contract is a REPO and the Box is checked as a 203b with Repairs to be escrowed. Some FHA lenders will not allow repairs to be escrowed. So if this transpires, USDA is the program to use. Make Sure to check with your lender and the RD office.
I hope this Information has been helpful. Knowing one's program of what they or will not require is so important during this time since Mortgage Programs are constantly changing. My number one priority is making sure that my Customer and the Realtor are being well educated and informed during the entire process of the transaction.
If you would like more information or Feedback, please feel to contact me. Have a great and Profitable Week !
Eric Meruelo
OakStar Bank Home Lending Team Division
Springfield, MO
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