Usda Mortgage Guidelines Changing 12/1/2015

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Hi LoanSafe Members,

There will be changes coming to the USDA program on 12/1/2014. They have not all officially been released just yet however I will update everyone once we receive the new guidelines.

USDA will NOT be accepting any new applications as of 11/21/2014 until 12/1/2014. All new submissions after this date must meet the new guidelines.

Our USDA matrix has been revised:
  • FICO score reduced to 620
  • 640 FICO required for Streamline Refinance and Manufactured Homes
  • We now offer Rate & Term along with the Streamline Refinance (no cash-out)

Current USDA Guidelines:
  • Purchase, Rate& Term and Streamline Refinance (No Cash-Out)
  • Primary Residence Only - No other real estate owned allowed.
  • Term: 30-year Fixed Conforming
  • Minimum Loan Size: 50,000.00
  • Maximum Loan Size: 417,000.00
  • Reserves: No reserves required
  • Down Payment: NO down payment required
  • 100% gifting permitted
  • DTI Ratio's: 29 front end/41 back end *front end is housing, back end is all debt*

Credit Scores:
  • 620 with automated approval for Purchase and Rate & Term Refinance
  • 640 with automated approval for Streamline Refinance
  • 640 with automated approval for Manufactured Homes
  • Each borrower must have a minimum of 2 credit scores. Non-traditional credit is not allowed. Report valid for 90 days

Guarantee Fee:
  • The up-front guarantee fee may be paid by the borrower, OR financed into the loan amount above the appraised value
  • Up-front Purchase and Refinance fee = 2% of the loan amount
  • Financed guarantee fee calculated: (loan amount / .98) - loan amount
  • Guarantee fee not financed: loan amount x 2%
  • May be financed above the appraised value
  • Annual fee is .50%

Derogatory Credit Info:
  • Chapter 7 & 13 Bankruptcy, Foreclosure & Short Sale have 3 year waiting period.
  • 0x30 late payments in the last 12 months
  • Collections: non-medical collections greater than $2000 must be paid in full, have satisfactory payment arrangements or we use 5% of the balance to qualify. Federal debts showing delinquency may not be eligible for financing
  • Judgments: Recorded outstanding judgments obtained by the US in a Federal Court (other than US tax court when a payment arrangement agreement is provided) are not eligible. Other judgments must be paid in full or there must be a current three (3) month history of regular payments

Ineligible Properties:
  • Previously modified loans
  • Log homes, dome homes, ineligible condos, co-ops, mobile homes, working farms or ranches or income producing properties
  • Max 15 acres, no unimproved land, tribal land, assisted living or boarding facilities

Understand that most of the guidelines posted above are prior to the new changes coming into effect 12/1/2014. Once the new rules come out I will return to this post and inform everyone of the new guidelines. If you have any questions please feel free to contact me at (619) 379-8999.
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