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Rural Housing Guaranteed Loans
Purpose:
To assist low and moderate income households through the guarantee of loans made by conventional lenders for the acquisition of modest single family new or existing homes in eligible rural areas.
Who May Borrow?
Home ownership guaranteed loans are offered to help families or persons with low and moderate income. They must meet the following criteria:
- Do not own an adequate dwelling.
- Are without sufficient resources to provide necessary housing and unable to secure necessary credit from conventional sources.
- Are U.S. citizens or legally admitted for permanent residence or on indefinite parole.
- Have legal capacity to incur the loan obligation.
- Will be the owner/occupant.
- Have acceptable credit history for past 12 months.
- Have an adjusted annual income which does not exceed 100 percent of the median income for the area (income limits can be obtained from any AmeriFirst Financial Office).
- Have adequate and dependable available income.
- PITI (Principal, Interest, Taxes and Insurance) not to exceed 29 percent of gross monthly income.
- MOTI (Monthly Obligations to Income) not to exceed 41 percent of gross monthly income.
Where May Houses be Located?
Houses be located in rural area which include open country or communities having a population not in excess of 10,000 or not in excess of 20,000 provided it is not a Metropolitan Statistical Area (MSA). Eligible area maps are available in any AmeriFirst Financial Office.
Houses will be located on desirable site with an assured supply of safe drinking water and suitable arrangements for sewage disposal.
Housing units may be financed in new or existing subdivisions approved by local, regional, state or federal government agencies.
What Type of Property May Be Financed?
Purchase of new or existing modest single-family house, or purchase and improve an existing modest house, and provide related facilities such as a garage or storage shed. Modest housing relates to the loan limits discussed below rather than square footage limitations.
Houses must provide decent, safe, and sanitary housing which will meet the borrower's needs.
The cost of the lot may not exceed 30 percent of the total appraised value of the lot and home combined.
What is Maximum Loan Limit?
There is no current maximum mortgage limit. This is subject to possible change in the future. There is a limit on income which will limit the amount of the mortgage.
The loan amount cannot exceed 100 percent of the appraised value of the property.
Repayment ability of the applicant is also a limiting factor.
What Are The Interest Rate and Terms?
A fixed interest rate will be established not to exceed the higher of the current VA or Fannie Mae rate for 90-day commitment plus 0.6 of one percent.
Mortgage insurance is not required.
All mortgages will be for a 30-year term.
What Are Some Prohibited Loan Purposes?
- Payment of construction draws.
- Refinancing existing term mortgage loan.
- Purchase or improvement to income-producing property.
- Payment of finder's fees for packaging applications or referral fees.
Are There Loan Fees and Other Charges?
A one-time guarantee fee of 1.0 percent of the loan amount is charged to the lender, but may be passed on to the loan applicants. In addition, the applicant is also responsible for those fees the lender customarily charges for similar type mortgage loans. Some expenses may be included in the loan provided the loan does not exceed the appraised value.
Call Gordon Cornwell at AmeriFirst Financial for Residential Mortgages at...
local: (231) 946-0320 :: toll free: (800) 442-9833
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Gordon Cornwell
Proudly Serving Northwest Michigan since 1980