Rural Development Loans USDA

Rural Development Loans, Continued
The following matrix outlines the applicable borrower types. All borrowers
must meet current FHA guidelines:
Eligible Borrowers
 Loans are granted only to natural persons
 Title must be held in individual names only
 Each borrower must have a valid social security number
 The following are permitted to the applicable MSI/agency underwriting guidelines:
• U.S. Citizens
 Permanent Resident Aliens
 Mortgage Company Employees have special requirements.
Ineligible Borrowers
 Borrowers that exceed the USDA moderate-income limits
 Borrowers without a clear credit alert number (CAIVRS)
 Possession by corporations or partnerships is not
acceptable, including, but not limited to, the following:
• S Corporations
• Real Estate Syndication
• General Partnerships
 Inter Vivos Revocable Trust
 Illinois Land Trust
 Non-Occupant Co-Borrowers
 Non-Permanent Resident Aliens
 Borrowers without a social security number
 Borrowers with diplomatic immunity
 Co-signors
 Life Estates
 Foreign Nationals
 Non-profit organizations
 Borrowers specifically prohibited by current FHA/USDA
 Each borrower must have a valid U.S. Social Security Card.
• Each borrower must be identified by one of the following tools: Driver’s License, State ID Card, Passport or
Government-Issued ID with photo. Must match all credit source documents. No multiple social security numbers.
• For Permanent Resident Aliens, in addition to one of the “tools” noted above, the borrower must provide current valid
“Green Card”. A copy must be included in the loan file at time of submission for underwriting. The documentation must
be approved by USDA.
 Borrowers may not exceed the current USDA-designated moderate income limits.
• You may use the following direct link to the current GRH Income Limits:
• Once you select the State and the income limits display, use the moderate income limits that are shown as “RHS
MOD.INC-GUAR.LOAN” See Underwriting/Borrowers for any additional details.
 Adding borrowers to Title: If a spouse is not on the Note, they may added on the Title.
 (5/04/12):MSI has specific requirements for borrowers who are employees/owners of a mortgage company, see
Underwriting/Borrowers/Mortgage Company Employee for details.
Waiver of escrow/impounds is not permitted under any circumstances.
Continued on next pageRural Development Product Suite
Rural Development Product Suite
Mortgage Services III, LLC Wholesale Seller Guide
Version 10/24/08 REV (8/09/13)
Rural Development Loans, Continued
The following matrix outlines the applicable property types:
Eligible Property Types
Unless otherwise specifically restricted or not permitted by the applicable loan parameters, the following property types are
acceptable to MSI/agency Guidelines:
 1 Unit Properties, attached & detached (1)
 Condominiums – Eligible - FHA/VA approved only- Document approval in the loan file.
 PUDs – to FHA guidelinesIneligible Property Types
 Auction – Properties purchased at Auction.
 2-4 Unit Properties
 Commercial operations
 Condotels
 Condex (converted to 2 units zoned as condo w/o HOA)
 Cooperative Projects
 Geodesic Domes
 Earth Homes
 Houseboats
 Income producing properties of any kind
 Mobile (Manufactured) Homes, single- or double-wide
 Model Home Leaseback properties
 Modular Homes (See Notes for exceptions)
 Multi-dwelling or Multi-Unit condominiums
 Non-Warrantable Condos
 Non-conforming zoning projects
 Own-your-Own", Timeshare/segmented ownership
 Leasehold Estate Properties
 Properties currently listed for sale or listed for sale within
the past 6-months
 Projects with pending litigation
 Properties with deed restrictions that limit transferability of
title, or contain a "first right of refusal" provision
 Properties located outside the United States or District of
 Properties that can be legally subdivided, regardless of
site or site value restrictions
 Unimproved (Raw) Land
 Working farms, ranches or orchards
 Properties located on Indian Reservations
 Properties with an in-ground swimming pool (2)
 Properties with assignments of purchase (assigning the
purchase contract to another party)
 Properties specifically prohibited by current USDA/FHA
(1) Property must be a nonfarm, non-income-providing tract.
• The value of the site must not exceed 30% of the total value of the property. MSI does not permit exceptions to this
(2) In-ground swimming pools are subject to a waiver from the USDA State Director of each individual state. The appraiser
must provide a value for the pool and the appraised value of the property must be adjusted by the value of the pool. Subject
to the approval of the waiver from USDA.
 Properties are eligible only in strict accordance with current USDA/FHA guidelines.-
 Condos and PUDs must be served by a Homeowner’s Association (HOA). See Government Product Suite for insurance
requirements for Condos and Attached PUD.
 Access this site for FHA-approved Condos,
 MSI will accept modular homes that are built like traditional “stick built homes” and are in full compliance with HUD
Handbooks 4150.2 and 4905.1.
 Outbuildings are subject to review by USDA; subject to 1980.311 (a) (4)