102% Financing may be available in your area! This is real...

Mortgage and Lending with Value Shield Financial Services

Many people across the country have seen the finance industry starting to pull back on financing in their area.  Subprime is pretty much gone along with Alt-A financing.  Fannie Mae (FNMA) and Freddie Mac (FHLMMC) are still out there with My Community and Flex 100 which offer 100% financing.  The only problem is that those programs require MI (mortgage insurance) and if you are in a declining market you will have a 5% LTV (loan to value) cut.  This means 95% is now the highest financing FNMA/FHLMC offer. 

This is the reason FHA is on the rise.  It finances 97.5% and the required funds from the borrower can be in the form of a gift or grant. 

There is another program out there.  This program is backed by the USDA and doesnt require MI.  The rates are in line with FHA and sometimes cheaper.  Here is some information for you on this product...

1. Full Doc transactions only

2. Rural Areas are only allowed

3. Customer needs to be below income table set by USDA

4. 102% financing off the appraised value, EVEN IF it is higher than the purchase price

***The customer cant receive money back at closing, but they can do upgrades like granite               countertops or tile floors with the extra money OR use it cover all closing costs.

5.  The program self funds itself.  The 2% is to cover a cost to the USDA to fund the program.

6.  This program is also not credit based - any score will do for this one. 

7.  If you score is greater than 620 - you can be one day out of Foreclosure, Bankruptcy, or CCC and you dont have to pay off ANY collections.

8.  Dont have to be a first time homebuyer.

This program is not out there to take the place of SUBPRIME, but I am sure the "bad apples" that are left will use it just like they try to sell FHA to their old SUBPRIME borrowers.  Yes, I am a little peeved about that last part.

I would suggest looking into this program on each of your FHA deals.  You will find the borrower to be in a better place if you do.  I use FHA for urban and city areas.  I use the USDA program for rural areas. 

I wish everyone well out there and hope this helps you to find more loans for your customers.  Have a wonderful day and take care!

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Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Thank you for the information. .

these days

we need all the help we can get!


May 21, 2008 11:58 PM #1
Chip Jefferson
Advanced Building LLC - Lexington, SC

But doesn't the USDA require it to be a rural on there coding to qualify? I do scattered building of home and certain in town property's don't qualify for this program.

May 21, 2008 11:59 PM #2
Douglas Clark
Wells Fargo Home Mortgage - New Bern, NC
Home Mortgage Consultant- NMLS #561149

Good information.  I've heard of this program and was amazed what they consider to be rural properties.  I have not had the opportunity to use the program, but in this market, I'm ready to try everything.  I've even done a few FHA deals recently and in the past we didn't even think about it due to the heavy concentration of vacation homes and investment properties.

Thanks again for the information.

May 22, 2008 12:51 AM #3
Chad Wille
Value Shield Financial Services - Windermere, FL

Chip.... The program does require the property to be in a rural area as defined by the USDA.  You will be surprised what they consider rural in your area.  Properties in town will still be best served by going with FHA. 

May 22, 2008 01:01 AM #4
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