Program participants at the monthly Chattanooga Mortgage Bankers Association (MBA) luncheon at The Loft were, from left, MBA President Kent Blye, Vice President Darren Strickland, Linda Whillock and Mary Short, rural development specialists from the Knoxville area office which covers East Tennessee. Click on photo to enlarge.
photo by Irby Park
Loan packages with no monthly mortgage insurance and financing up to 100 percent of the appraised value are among a variety of features making the Guaranteed Rural Housing (GRH) program attractive, said Linda Whillock, rural development specialsit with the U.S. Department of Agriculture (USDA).
Speaking at the monthly luncheon meeting of the Mortgage Bankers Association (MBA) of Chattanooga at The Loft, she said the GRH program was designed to bridge the gap between government and private mortgage lending which had existed in many rural areas.
Since its inception in 1991, the program level has grown nationally with over 2,000 lenders currently participating making this private-public partnership a proven success story.
The program fills a need for thousands of rural Tennessee families that have the income but lack the down payment ability. The USDA Rural Development Guaranteed Loan Program can help families purchase a home.
Outlining the features of the program, Ms. Whillock said , “We feel like it’s an excellent product.”
A loan with no monthly mortgage insurance makes the program one of the most financially attractive options available.
The guarantee fee can be financed and included in the loan which can be up to 100 percent of the appraised value. Loans may include closing costs, legal fees and other prepaids, but buyers or sellers are responsible for required fees not covered by the appraisal.
Also with the GRH program if the seller wants to pay all or a portion of the closing costs, there is no maximum seller concessions. Those fees and costs also may be paid from gift funds from friends and family, but a letter must be provided stating that no repayment is required.
Homes may be new or existing with no size restrictions, but must be adequate and functional. Increased loan limits, she said, make loans available to more moderate income applicants.
GRH loans are accepted by Fannie Mae, Freddie Mac, Ginnie Mae and Tennessee Housing Development Agency (THDA) and lenders can use their own forms since Rural Development loans may be closed using conventional documents.
USDA’s Tennessee Rural Development mission includes Rural Housing Service (RHS) which, in addition to the (GRH) loan program, includes self-help housing loans with families providing part of the construction labor, home repair loans and grants, multi-family housing and housing preservation grants. It also includes Rural Business-Cooperative Service (RBS), Rural Utilities Service (RUS) and Community Facilities Program (CF).
Ms, Whillock said the Knoxville area office to which she is assigned is the service office for East Tennessee.
More information is available at www.rurdev.usda.gov about the USDA Rural Development program.