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DIRECT versus GUARANTEED Income limits for USDA Rural Housing Loans
Ok, so I’m having a conversation with a Loan Officer for another mortgage company yesterday and I get this idea that maybe I should help our community by providing a better understanding regarding some of the “do’s and dont's" surrounding the USDA Rural Development Loan.  During this phone conversation, I quickly realized that the scenario provided was based on a misunderstanding of the difference between DIRECT versus GUARANTEED Income limits. DIRECT USDA Loans are loans that are entirely underwritten directly at the local USDA office, similar to going to the DMV in terms of service. The DIRECT USDA Loans are generally reserved for very low income borrowers. GUARANTEED USDA loans are typically underwritten by direct lenders with a “second look”/underwriting review from the local USDA service center. That’s the abbreviated explanation between DIRECT versus GUARANTEED USDA Loans. There’s more to it, but an entirely different discussion… The USDA Guaranteed Rural Housing (GRH) Program offers greater flexibility for your clients in terms of income limits. The new 2009 income limits for the USDA Guaranteed Rural Housing (GRH) Program offers an easy to understand 2 tier system. The 1st tier provides an income limit for household sizes of 1-4 persons and the 2nd tier provides an income limit for household sizes of ... more

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