USDA Rural Development has implemented BIG changes and added new guidelines effective 12/1/14. After reviewing the new rules, we have compiled some of the most important changes below. 1) Homes are now allowed to be in a flood zone. Prior to this rule, if any part of the home’s living area or any mechanicals were in the flood zone, the home would be ineligible for USDA financing. 2) Out buildings are allowed as long as they are not used for income producing activities. Hobbies are acceptable. 3) The maximum closing costs and prepaid items allowed to be paid by seller is now 6% of the purchase price. 4) Cisterns are no longer acceptable. 5) Homes with in-ground pools are now eligible. Prior to 12/1/14, no value could be given to in-ground pools. If the appraiser gave value to the pool, the amount would need to be deducted from the price. USDA has tightened guidelines on the borrower’s income, credit and ability to pay. It’s more important than ever to make sure the lender is verifying all income and credit PRIOR to issuing a pre-approval. For your clients’ sake, make sure you are working with a reputable and knowledgeable lender (like us!) familiar with the new USDA guidelines.
Author:Kathy Toonder Phone: 941-544-7270 Dated: January 14th 2015 Views: 754 About Kathy: I enjoy walking the warm sandy beaches, swimming and watching the magnificent sunsets on Florida’s...
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