Rural Housing Loans in NC

1. USDA RURAL HOUSING

2. Agenda • Loan limit • Cash investment and maximum loan-to-value (LTV)* ratio • Guarantee fees • Underwriting process • Eligible areas * LTVs and CLTVs may vary by loan amount.

3. Loan Limit • • USDA* offers 100% financing in approved rural areas and townships No maximum loan limit - this will be determined by borrower’s ability to repay Income limits apply based on location • *USDA Guaranteed Rural Housing loans subject to program stipulations and applicable state income and property limits.

4. Cash investment and maximum loan-to-value (LTV)* ratio • • No buyer contribution is required Sellers are permitted to pay all closing costs up to 6% of the purchase price Borrowers with 20% of the purchase price in liquid assets may not qualify for USDA financing • * LTVs and CLTVs may vary by loan amount.

5. USDA* Guarantee Fees • • 1% up front financeable guarantee fee .35% monthly fee *USDA Guaranteed Rural Housing loans subject to program stipulations and applicable state income and property limits.

6. Underwriting Guidelines • Credit: – Minimum 620 FICO • Qualifying Ratio: – 29/41% Debt-to-Income (DTI)* ratio – Borrowers are not eligible if DTI is over 31% and payment shock exceeds 100% *Debt-to-income ratio is monthly income debt/expenses divided by gross monthly income.

7. Underwriting Guidelines…cont’d • Income Limits: – Reference guaranteed housing program income limits • Bankruptcy, Foreclosure, Short Sale and Judgement information: – Minimum 3 years of re-established credit – All judgements must be brought to a zero balance and released

8. Underwriting Guidelines…cont’d • Student Loans: – All student loan payments are included in DTI* even if deferred • Appraisal: – USDA appraisals are done by approved FHA appraisers and good for 120 days *Debt-to-income ratio is monthly income debt/expenses divided by gross monthly income.

9. Underwriting Guidelines…cont’d • Qualified Property Types: – Non-Farm residences in approved geographic areas only – Outbuildings okay only if it can be proven that the property has no commercial use – Single family, condos okay if approved on FNMA, FHA or VA approved condo list – USDA* will allow properties in a 100-year flood zone only if an elevation certificate proves that all of the home including the basement, are above the 100-year flood elevation *USDA Guaranteed Rural Housing loans subject to program stipulations and applicable state income and property limits.

10. Underwriting Guidelines…cont’d • Qualified Property Types…Cont’d: – Manufactured housing okay if purchased within 1-year of build by approved manufacturer. Must include land. – No sub dividable lots, but no limit on acreage – Well potability test and septic inspection are required if applicable to the property – Escrow holdbacks okay up to $2,500 on REO purchases if the repairs do not affect livability. Not allowed are roof, sewer/septic, structural, foundation. Escrow amount must be 1 ½ times the bids to do the work.

11. REQUIRED DISCLOSURE BELOW Copyright © 2019 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations may apply. Equal Housing Lender. USDA Guaranteed Rural Housing loans subject to program stipulations and applicable state income and property limits. Fairway is not affiliated with any government agencies. These materials are not from HUD or FHA and were not approved by HUD or a government agency. NC License Number 2289.