Trulia
Please see our latest update on USDA Funding here:
http://www.usdamortgageonline.com/usda-mortgage-funding-update-9262012/
USDA Refinance Funds Have Been Exhausted for Fiscal Year 2012!
August 21, 2012
USDA Mortgage Purchase and Refinance Funding Update
This announcement is to inform you of the current commitment authorities available for the Single Family Housing Guaranteed Loan Program (SFHGLP) loans.
Due to a change in Fiscal Year (FY) 2013 fee structure which goes into effect October 1, 2012, Lenders are urged to check with States to determine application processing time frames before underwriting applications.
USDA Mortgage Refinance Funds:
FY (fiscal year) 2012 USDA Mortgage refinance funds have been exhausted.
We expect to run out of refinance commitment authority no later than Monday, August 20, 2012. When USDA Mortgage refinance commitment authority is exhausted, refinance loan requests for which a conditional commitment (Form RD 1980-18) has not been issued will be returned to the lender and require underwriting under the fiscal year 2013 fee structure. The FY 2013 fee structure will require a one-time upfront guarantee fee of 2 percent and an annual fee of 0.40 percent. At this time, the Agency will not issue conditional commitments “subject to” receipt of FY 2013 funding or commitment authority.
USDA Mortgage Purchase Funds:
Lenders are urged to be cognizant of the differing backlogs and processing time frames from state to state. If it is determined unrealistic that the State will be able to review the USDA loan guarantee application and issue a conditional commitment before September 30, 2012, lenders are urged to underwrite the USDA Mortgage application at the FY 2013 fee structure. The FY 2013 guarantee fee structure will require purchase and refinance loans to carry a one-time upfront guarantee fee of 2 percent and an annual fee of 0.40 percent.
In addition, if the state where the property is located is experiencing longer processing time frames, lenders should advise the applicant accordingly when discussing interest rate locks and potential loan closing dates.
For questions regarding this announcement please call (877)228-9069.
USDA Mortgages and Student Loans, What You Need To Know
STUDENT LOANS AND DEBT-TO-INCOME RATIOS:
Income Based Repayments and Deferred loans
Student loans are long term liabilities that must be included in the debt ratio calculation per USDA Mortgage Instruction 1980-D, section 1980.345(c). Because some student loans are not on fixed payment plans, the repayment amount due may increase or decrease without regard to additional liabilities incurred by the borrower. Therefore an accurate monthly liability amount for this payment must be included in the debt ratio when qualifying the applicant for a USDA Mortgage obligation.
All student loans must have documentation to verify the current payment due (e.g. letter from a loan servicer, online account verification, etc.). Verifications are valid for 120 days, 180 days for new construction.
Student Loans: Conventional/Fixed Payment/Deferred:
· Lenders may review the account statements and use the fixed monthly payment due (no adjustable payments).
· Deferred student loans that are not in repayment status must use an estimated payment of 1% of the loan balance, or a verified fixed payment provided by the loan servicer to document the payment that will be due.
Student Loans: Income Based Repayment (IBR):
· IBR amounts are not fixed payments and may increase annually.
· IBR payments of $0 are not eligible to be used in the debt ratio.
When an applicant provides documentation of an IBR agreement and payment from the loan servicer the following apply:
1. If the IBR payment is less than $100 and 1% of the total loan balance is more than $100, a minimum payment of $100 must be included in the debt ratios.
2. If the current IBR payment is over $100, lenders may use that payment amount in the debt ratios.
August 1, 2012
Advance Notice: Changes to the USDA Mortgage Upfront Guarantee Fee and the monthly mortgage insurance Annual fee
Effective on October 1, 2012, the start of Fiscal Year (FY) 2013, Rural Development will revise the Up-Front Guarantee Fee and the monthly mortgage insurance fee structure as follows:
Up-Front Guarantee Fee
|
FY 2012 Through 9/30/2012 |
FY 2013 Effective 10/01/ 2012 |
|
| Purchase Transactions (no change) |
2% |
2% |
| Refinance Transactions |
1.5% |
2% |
Annual Fee
|
FY 2012 Through 9/30/2012 |
FY 2013 Effective 10/01/2012 |
|
| Purchase Transactions |
.30% |
.40% |
| Refinance Transactions |
.30% |
.40% |
The FY 2013 fee structure is applicable to all Conditional Commitments (Form RD 1980-18, “Conditional Commitment for Single Family Housing Loan Guarantee”) issued by Rural Development on or after October 1, 2012. Loan guarantee requests submitted to Rural Development by September 30, 2012, in which a Conditional Commitment has not been issued, will be subject to the FY 2013 fee structure.
Lenders are encouraged to plan for the changes noted and should keep in mind that some Rural Development offices are experiencing extreme backlogs in loan guarantee delivery. There are no exceptions to the FY 2013 fee structure. Therefore, starting on October 1, 2012 all Conditional Commitments will be subject to the FY 2013 fee structure, regardless of the date the request was received by Rural Development.
The FY 2013 fee structure is only applicable to Conditional Commitments issued on or after October 1, 2012, Conditional Commitments issued by Rural Development prior to this date are not subject to the new fee structure.
