Do USDA or FHA appraisals require a stove or other appliances to be present in the property? What are FHA and USDA appliance requirements?
In today’s short video I am going to share with you the details on FHA and USDA appliance requirements so you can be prepared for that next appraisal!
However, before we get started, don’t forget to take advantage and download our “USDA Blueprint for Success.” This free guide is designed to walk you through the USDA process step-by-step. Plus, it’s an excellent tool for both homebuyers and realtors alike.
FHA and USDA Appliance Requirements
As a starting point, USDA and FHA loans are both governed by minimum property requirements found in HUD Handbook 4000.1.
In turn, HUD Handbook provides the following definition for appliances:
“Appliances refer to refrigerators, ranges/ovens, dishwashers, disposals, microwaves, and washers/dryers.”
Further, the handbook also states that any appliances, from those listed above, “Are to remain and that contribute to the market value opinion must be operational.”
It also requires that the “Appraiser must note all appliances that remain and contribute to Market Value.”
Do USDA or FHA appraisals require appliances to be present on the property?
In summary, despite what many think, stoves and other appliances are not required. However, for those appliances that do remain and contribute to market value, they must be operational!
For example, while you don’t necessarily have to have a stove, if there one there, it should be in working condition!
Remember, as your government loan experts, our team is ready to work for you! Whether it be FHA, VA, or USDA Rural Housing Loans – Just call or email to discuss your scenario and let us show you the “Metroplex” difference.
800-806-9836 Ext. 280
I want everyone to make it a great day, and I look forward to seeing you right here for the next tip of the week!
P.S. – You can download our “USDA Blueprint for Success” by CLICKING HERE.
The Florida Homestead Exemption helps homeowners save money on their property taxes by reducing the assessed value of their property which in turn lowers the amount of property taxes.
However, timing and eligibility details are critical when qualifying for this exemption.
That’s why today’s video will break down how the Florida Homestead Exemption works, who can apply, and what benefits are available for those that are eligible.
Remember, if you have a contract that needs an expedited closing date, our In-House USDA and VA underwriting may be your solution! Simply call or email to discuss your scenario and let us show you the “Metroplex” difference!
Florida Homestead Exemption Qualifying
Once the journey to purchase a home has been completed, property tax exemption benefits may be available. However, timing is critical in order to qualify and keep those potential savings from slipping away.
The Florida Homestead Exemption reduces the taxable value of the property and is a provision found within Article X, Section 4 of the Florida Constitution. Additional details can also be found within Article VII, Section 6.
The Florida Homestead Property Tax Exemption provides that each person who holds legal title to real estate as of January 1 and maintains the property as their primary residence (not a second home or investment property) may receive up to a $50,000 homestead exemption.
This is further explained by the Highlands County Property Appraiser as follows:
“Every person who has the legal or equitable title to real estate as of January 1, and maintains it as their permanent residence or as the residence of another legally or naturally dependent upon the owner may be entitled to up to $50,000 homestead exemption.”
“The first $25,000 applies to all property taxes, including school district taxes. The additional exemption up to $25,000, applies to the assessed value between $50,000 and $75,000 and only to non-school taxes.”
“In addition, assessed value increases on your homestead property will not exceed the lower of 3% per year, or average CPI, exclusive of any additions or renovations to the homestead.”
While we are using Highlands County as an example, if you are in another county please contact your local property appraiser to ask any questions and confirm all deadlines.
Provided you are eligible, a homestead exemption filing deadline is March 1 of the year for which the exemption will apply. If March 1 lands on a weekday or holiday or for any late filing questions, please contact your local property appraiser for any filing date confirmations.
Questions to be Prepared For
Furthermore, be prepared to answer the following types of questions:
- Whose name or names were on the title on January 1?
- What is your social security number and your spouse’s social security number?
- Were you or your dependent living in the dwelling on January 1?
- Do you claim residency in another county or state?
While these question examples were provided by the Florida Department of Revenue, the property appraiser may ask additional questions.
Also, if you have moved from a previous Florida homestead, you may be eligible to port your entire homestead of a portion of it through the Save our Homes Portability Transfer.
Other Florida Exemptions
In addition to the Florida Homestead exemption, here are other exemptions that a person may be eligible for in Florida:
- Active Duty Military and Veterans
- Tax benefits for persons 65 or older
- Additional exemptions are also available and here is the link for further research
A great resource for additional exemption questions is your local county property appraiser. Here is a link to the list of Florida County Property Appraiser offices.
Before we go, don’t forget to take advantage of our free Second Opinion Service “SOS.” It’s designed to help Realtors and Buyers get access to an expert second opinion. This is great for both new pre-qualifications and loans that are already in progress.
(800)806-9836 X 280
Mortgage loan limits are on the rise in 2021, but it’s not the same limit across programs. In fact, USDA, VA, FHA, and Conventional loan programs each have their own limits. This is why it’s important for us to quickly review each maximum loan amount for each of these mortgage programs.
Plus, in order to help you stay organized, we’ve created a FREE Loan Comparison Chart for you to download. It compares each loan programs side-by-side and is contained in one simple chart… Download it now!
What is a Maximum Mortgage Loan Limit?
To begin, a mortgage loan limit is the maximum amount a home buyer can borrow under a specific mortgage program. Just remember, a loan limit applies to the loan amount and not the home’s sales price.
Believe it or not, there is actually not a loan limit for USDA loans. Wait a second, is this a trick? Nope, it’s true. Since there is no maximum sales price for a USDA loan, this means there is also NO maximum mortgage loan limit!
Instead, the USDA maximum loan amount is calculated based on the applicant’s ability to qualify. Thankfully, USDA income limits have increased as of May 4th, 2020. This recent USDA income limit increase results in making it easier for homebuyers who are trying to qualify for higher priced homes.
Thus, without a loan limit a USDA mortgage can be a powerful option!
VA loan limits depend on whether or not you have used your full entitlement.
To have full entitlement you must never have used your VA home loan benefit or have paid a previous VA loan in full (including after a bankruptcy, foreclosure, or a short sale.) In these cases there is no maximum VA mortgage loan limit!
On the other hand, if you have used some of your entitlement, but have funds remaining, your VA home loan limit is now the same as the Federal Housing Finance Agency (FHFA). Meaning, they are based on the county loan limit where the property resides.
Calculating available VA entitlement and your maximum VA mortgage loan limit can be complicated, so if you have any questions just call or email so we can go to work for you!
Conventional Loans (Fannie Mae and Freddie Mac Conforming)
Conventional loan limits are established by the FHFA (Federal Housing Finance Agency) and ultimately can vary based on you county. That being said, home prices rose an average of 7.42% across the nation, and in turn the lending limits for conventional loans have also increased.
Previously, the 2020 general loan limit was $510,400. Now in 2021, the baseline conventional loan limit has increased to $548,250 for a 1-unit property.
However, this number has increase even more for those areas which are considered “high-cost”.
For more information go to the Federal Housing Finance Agency’s (FHFA) announcement.
Due to an increase in housing prices the FHA announced on December 2nd, 2020 that it would increase it’s loan limit in 2021 for 3,108 counties and remain unchanged in 125 counties.
Overall, the maximum FHA standard mortgage loan limit for a one-unit property has increased from $331,760 in 2020 to $356,362 in 2021! Additionally, the respective loan amounts have also increased for 2,3, and 4 unit properties that are eligible for FHA financing. They are listed here:
- 1-unit property: $356,362
- 2-unit property: $456,275
- 3-unit property: $551,500
- 4-unit property: $685,400
As a reminder high cost area limits allow for even higher maximum FHA mortgage loan limits.
For a complete list of FHA loan limits visit the FHA’s loan limits page, here.
We Are Always Here for You
As you can see, mortgage loan limits vary across loan programs. However, there’s no need to be overwhelmed. Let our experience be your resource!
Whether it be USDA, VA, FHA, or Conventional, simply call or email to discuss your scenario and let us show you the “Metroplex” difference!
(800)806-9836 Ext. 280
As I take a step back and look at this past year of USDA articles, there is a handful that stand out as the clear top 5.
These articles were visited by thousands of people just like you. They come in order to learn about USDA loans, their guidelines, how to qualify, and any recent updates to the program.
Take a look at our top 5 USDA articles of 2020 and click through for more specific information on that topic.
Top 5 USDA Articles of 2020
1. How Much USDA Land can be Purchased with a USDA Home Loan?
This definition opens up the potential for higher amounts of USDA land to be purchased. Plus, comparable sales in the area can help justify the site size.
As a result, do NOT assume the eligibility of a property’s acreage. Instead, let us review your scenario first.
2. UPDATE: Improved USDA Guidelines on Student Loans!
This update provides the ability to increase your overall budget and price range.
3. USDA Update! – What Repairs can be Financed into a USDA Loan?
This allows for an escrow repair option that can be applied to specified repairs. Essentially, it allows for certain repair items to be financed into a USDA loan.
4. How do you Calculate Florida Intangible Tax and Transfer Tax When Purchasing a Home
- Florida Transfer Tax: Calculated by taking 70 cents for each $100 or fractional part. Plus, the state assesses a tax of $.35 cents per $100 of the face value of any promissory note.
- Florida Intangible Tax: Calculated as 2 mills per each dollar amount of the note ($.002) secured by the mortgage.
Don’t let these costs sneak up on you!
5. What USDA Closing Costs can be Included with your Loan?
However, when the appraised value is higher than the sales price these settlement charges can be financed into a USDA loan.
That concludes our top 5 USDA articles! But before you go, don’t forget to visit our Free Resources page and download any one of our free guides. They include:
- Your USDA Blueprint For Success
- Mortgage Type Comparison Chart
- Your Guide to USDA Financing for New Construction
- USDA Fact Sheet
- USDA Condo Approval Steps
USDA guidelines allow for a wide range of possible repairs. In today’s video, I’ll explain the eligible types of repairs and review how it’s possible to get a USDA home loan with repairs.
Also, please download our USDA Blueprint for Success. This educational resource helps break down the USDA process step by step. It’s great for both realtors and home buyers alike!
Previous USDA guidelines did not allow roof and plumbing repair to be escrowed and repaired after closing. However, current guidelines now permit a wider range of eligible repair types and no longer restrict roof or plumbing repairs.
USDA Home Loan with Repairs
- Plumbing, Flooring, A/C Units, and also Roof Repairs
- Any type of repair that does not affect the livability or safety of the home
Repair costs are not allowed to exceed the LOWER of either 10% of the proposed loan amount or $10,000 whichever is lower.
- Contractor invoice will be required for all repairs
- No self-help allowed
- Repair work to be completed within 30 days after closing
- Appraised value must be high enough to support the new loan amount with repairs
- Repair funds are then taken from the loan and escrowed with the title company at closing
Also, there is a required 50% deposit of the total repair cost due at the time of closing. This is allotted to cover any potential cost overruns and can be from either the buyer or seller. However, it cannot be financed.
The term “escrowed” means being able to deposit the repair money into a third party’s account. Usually, it is a title company or closing attorney that holds the funds post-closing until further instructed by the lender to disburse.
After successful completion of the required repairs, a documented final inspection must be approved by the underwriter. The approval releases the funds from the title company to the contractor and the 50% deposit occurs.
In summary, USDA loan repairs are not for full-blown renovations but an escrow repair option. In turn, you can pinpoint specific repair items and allow them to be financed into a USDA loan.
Remember, we are a top-ranked USDA Approved Lender with experience and expertise! With the USDA program, we can help homebuyers make the most of their qualifying ability. Simply call or email to discuss your scenario and let us show you the “Metroplex” difference!
(800) 806-9836 Ext. 280
I want everyone to make it a great day and I look forward to seeing you right here for the next tip of the week!
It’s a common misconception that all lenders, banks, brokers, and credit unions who offer USDA loans have the same systems in place. In reality, not all lenders are approved by the USDA and this can greatly affect your USDA approval time.
Today, I’ll review why being a USDA approved lender is particularly important for processing, underwriting, documentation, knowledge, and overall efficiency which in the end saves valuable time.
You can also get more USDA mortgage information by downloading our FREE guide: Your USDA Blueprint for Success. This resource will provide you an overview of the USDA home loan process, eligibility requirements, and more!
USDA mortgages are unique in their qualifying criteria, benefits, and the eligible areas they serve. Thus, working directly with a USDA approved lender brings specific advantages! Let’s review the benefits this adds to the loan process.
USDA Processing and Underwriting
USDA approved lenders have direct access to the Guaranteed Underwriting System, otherwise known as “GUS”. This Automated Underwriting System is specific for USDA loans and their eligibility.
When working with GUS, it provides a roadmap for eligibility, maximum debt ratios, and qualifying limits. This is a helpful guide to both realtors and homebuyers when shopping for a home.
Save on Processing and USDA Approval Time
While there can be more steps in the USDA loan process than a conventional loan, USDA approved lenders are able to work directly with USDA field offices. This eliminates the middle man and can greatly improve processing and approval times.
Plus, having direct communication between our office and the USDA specialist is critical for managing the loan file, responding to questions, supplying additional documentation, and providing quick clarification when requested.
Prioritize USDA Loan Specific Documentation
USDA Rural Development requires specific documents as part of their approval process. In turn, a USDA approved lender understands how to prioritize the items needed in order to send the file to the USDA.
While the file is awaiting USDA review, an approved lender can satisfy the remaining underwriting conditions and prepare the file for loan closing once the USDA commitment has been received. This offers a decided advantage in efficiency and timing for any homebuyer and realtor.
USDA Knowledge and Experience
Another great benefit to working with a USDA approved lender, is the amount of expert knowledge they hold. USDA loans cover a specific market, and it’s imperative that lenders know the ins and outs of this unique loan program.
USDA approved lenders understand how the program can be maximized for both consumers and the real estate community.
For an applicant to obtain a USDA home loan, it may not be necessary for them to work directly with an approved lender.
However, for those who can work directly with a USDA approved lender the many benefits we reviewed can be gained.
Here is the USDA Rural Development Approved Lender List (Guaranteed Program) for you to review.
Plus, as an approved USDA lender ourselves, please remember that we are always just a call or email away. We are here as your personal experts and are ready to discuss your scenario. Let us show you the “Metroplex” difference!
I want to thank everyone for their continued referrals and for making us your USDA lender of choice!
With more and more buyers looking in rural areas, many of them also inquire about options for acreage and how much can be financed with a USDA loan.
Well, the good news is that updated USDA guidelines now permit improved flexibility with the amount of acreage that may be financed with a USDA loan.
In today’s video, we will discuss the details and explain USDA eligibility guidelines for those acreage situations.
Before I get started, please download our FREE guide USDA Blueprint for Success. With this guide, homebuyers and realtors alike will learn must-know details about the USDA qualifying process!
It is important to note that the USDA Rural Development Single Family Housing Guaranteed Loan Program (SFHGLP) is designed for Single Family Housing. It is not for working farms or income-producing properties.
USDA Acreage Limit
USDA Guidelines previously had the following guidelines when the site value exceeded 30% of the total overall appraised value:
- The value of the site must be typical for the area, as evidenced by the appraisal; and
- The parcel cannot be subdivided into two or more sites.
For example, if you had a property that appraised for $100,000 and the appraiser noted that the site value of the appraisal was at $35,000. Then that portion would be at 35% of the appraised value which would exceed the 30% guideline. This would then require both of the mentioned steps above to be met in order to proceed.
Updated USDA 3555 guidelines are now more simplified when it comes to USDA acreage limits. Under the current site size guideline requirements it now states:
“The site size must be typical for the area.”
Thus, there is technically no maximum USDA acreage limit. This clarification clearly opens up the potential for larger acreage properties. Plus, it no longer requires the burden of documentation if the property could be subdivided.
Ready for Acreage?
In summary, don’t assume USDA loan eligibility in cases of acreage. In fact, comparable sales in the area can be used to help justify the size of the property.
When determining how many acres you may qualify for, remember that increased acreage can require additional review upfront.
800-806-9836 Ext. 280
Lastly, don’t forget to download our USDA Blueprint for Success. Make it a great day and I look forward to seeing you for the next tip of the week!
While USDA and VA loans are both fantastic no down payment financing options, they also have their own unique features and eligibility requirements. In today’s short video, I will break down and review three important differences between USDA and VA loans.
Additionally, to help you stay organized with the key differences between programs, we’ve created a FREE Loan Comparison Chart for you to download. It compares USDA, VA, FHA, and Conventional loan programs side-by-side and best of all, it is contained in one simple chart!. Download it now!
No Down Payment – USDA and VA Loans
As many of us know, both USDA and VA home loans both allow for no down payment. They are also both known for their flexible credit qualifying, manual underwriting availability, and shortened time frames for qualifying after recent bankruptcies, foreclosures, and short sales.
Now that we have covered some of their basic similarities, let’s review three important differences between USDA and VA mortgages.
1. Eligibility Requirements
Both USDA and VA home loans are very specific when it comes to eligibility. Plus, they are very different from FHA and Conventional loan qualifying guidelines.
USDA guidelines specify that applicants must meet household income limits as outlined per county. Additionally, the property must also be located in a USDA eligible area.
2. Maximum Loan Amount
The fact that there is NO maximum USDA loan amount is one of the best kept secrets of the USDA loan program. The USDA maximum loan amount is calculated based on the applicant’s ability to qualify.
For a VA mortgage, the basic entitlement for each eligible Veteran is $36,000 which allows for loan amounts up to $144,000. However, for those loan amounts above $144,00 a veteran may utilize what is called additional or “bonus entitlement” which allows them to increase loan amounts above $144,000.
Additionally, under the Blue Water Navy Vietnam Veterans Act of 2019 this has helped to expand maximum guaranty amounts under the VA program. We understand that the calculation of the VA entitlement and maximum loan amounts may be complicated, so please just call my office with any questions at 800-806-9836 Ext. 280.
3. “Mortgage Insurance”
While USDA loans do not require private mortgage insurance (PMI), they do have an annual fee. The annual fee is calculated on a monthly basis and included with your mortgage payment. Also, USDA Loans require a 1% Guarantee fee which is a one-time charge collected at closing that may be financed into the loan.
VA loans, on the other hand, do not have a PMI or an annual fee. Instead, a VA mortgage requires a VA Funding Fee.
The VA Funding Fee ranges anywhere from 0% to 3.6% and is calculated based on the type of service, previous usage, purchase or refinance, and any down payment. This is a one-time cost that is collected at closing and may be financed into the loan.
There are times when the funding fee is waived. This is for certain Veterans that have a service-connected disability and for the surviving spouse of a Veteran who meets certain eligibility requirements.
Benefits of working with a USDA and VA Approved Lender
Metroplex Mortgage Services is an approved USDA and VA lender and as a result, we take immense pride in serving both our rural and military communities.
We work hard to have specific loan systems in place that help our customers walk through the qualification process which allows our team to assist with important items like…
- VA Certificate of Eligibility;
- Calculating the VA entitlement;
- Reviewing eligible USDA areas and property types;
- Determining USDA income eligibility; and
- Upfront review for those who are self-employed!
Remember, let our experience be a resource for you! Whether it be USDA, VA, FHA, or Conventional, simply call or email to discuss your scenario and let us show you the “Metroplex” difference!
(800) 806-9836 Ext. 280
The USDA loan program is sought after by homebuyers due to their 100% financing, affordable terms, and flexible credit qualifying. That is why it is so important to understand the basics on how to become USDA eligible.
In my opinion, the USDA program is still very underutilized, with many banks and lenders not even offering the program, or if they do, it is in a limited manner. We, at Metroplex, are here to change that! With today’s topic, I’ll explain exactly what a USDA loan is and how to qualify.
Now, before we get started, remember to take advantage and download our USDA Blueprint for Success with the link below.
This free guide is designed to walk you through the process step-by-step and is a great tool for both homebuyers and Realtors alike.
Key USDA Eligibility Requirements
1. USDA Eligibility- Property and Income
First off, to qualify for a USDA loan, the property you are interested in must be your primary residence and located within a USDA eligible area.
2. USDA Eligibility- Income
Remember, USDA loans are also income-based. Thus, the program calculates a total family household income, but not just for who is on the loan.
However, for loan qualifying, we can only use the income of whoever is on the loan. This is otherwise known as repayment income.
Thankfully, the USDA has a very user-friendly site that can help determine if your property is eligible and also provide county income limits. Go here to search the USDA Property Eligibility Map.
3. USDA Eligibility – Credit Qualifying
While minimum credit conditions do apply, USDA loans can offer qualifying flexibility for previous bankruptcies, foreclosures, and short sales. Exceptions are on a case by case basis, so if you have a scenario to discuss please inquire with my team.
In situations where there is a limited credit history, USDA guidelines also allow for non-traditional or alternative credit references. Common examples include verification of rent, telephone, or utility payment histories.
Lastly, remember that while USDA loans are thought of as being for first-time homebuyers, they are also available for previous homeowners.
USDA Approved Lender – What are the benefits?
Obviously, this is just a broad overview of the USDA program, but you can see from this information that it is possible to become USDA eligible and start your USDA journey in the right direction!
If you are a homebuyer looking to purchase a home in an eligible rural area, you may be able to qualify for this fantastic USDA program. Plus, as a USDA approved lender we understand the intricacies and importance of a USDA mortgage and can be your guide!
P.S. For more on the USDA home loan process and eligibility requirements, please download our FREE “USDA Blueprint for Success.”
Do USDA loans require verification of rent? Do you have to prove previous rental history in order to be USDA eligible?
Today’s topic is important because USDA guidelines do not always require verification of rent. In this short video, I’ll explain when verification of rent is required for USDA eligibility. This will keep you in the know and your closing on track!
Before we get started, don’t forget to download our education packet. This free guide is designed to help walk you through the USDA mortgage qualifying process step-by-step and is ideal for homebuyers and realtors alike.
Verification of Rent
Everyone’s qualifying situation is different because a person may pay their rent by cash, check, money order, or a combination.
They may also make their payments to a private individual, apartment complex, or an independent management company. Plus, an individual may not have a verifiable rental payment history, such as when one is living with family or rent-free.
As a starting point, USDA guidelines state the following under rental payment history:
“An indicator of future mortgage payment probability is the applicant’s payment of their current rent or housing.”
What determines if a Verification of Rent is required?
The USDA Guaranteed Underwriting System (“GUS”) is responsible for indicating if a Verification of Rent (VOR) is required.
GUS will generate either an Accept, Refer, or Refer with Caution underwriting recommendation.
An Accept recommendation allows for streamlined processing and does not require a VOR.
However, a GUS recommendation of a Refer or Refer with Caution may require Verification of Rent. When required, a full 12-month history is called for. If a full 12-month history is not available, USDA guidelines allow lenders to “verify the amount of rental history that has been paid.”
Also, USDA cautions that having one rental payment over 30 days late within the previous 12 months is “significant derogatory credit and will require a credit exception.”
What does this mean to your transaction?
In summary, verification of rental history is not required when a GUS recommendation is Accept. However, some lenders may still require this information and in turn, slow down processing time.
With a GUS recommendation of Refer or Refer with Caution, verification of rental history is required. In this case, an acceptable rental payment history will be necessary and the required documentation depends on how your rent is paid and the type of landlord you make the payments to.
Lastly, if you have been denied a USDA loan due to verification of rental history, please call or email us today in order to take advantage of our free 2nd opinion service. It gives you access to an expert opinion and possibly keeps financing on track!
Just call or email to discuss your scenario and let us show you the Metroplex difference!
(800) 806-9836 Ext. 280