USDA Rural Development recently made some positive changes on December 1st 2014 to the 502 Guarantee loan program. The previous 1990-D rule have been replaced with the new rule 3555. Below we will discuss some changes.
- USDA will now accept the value of in ground swimming pools and permit this value to be included in the appraisal. In the past USDA required the value of any in ground swimming pool to be disregarded or not counted when determining overall appraised value. This would often time to lead to appraisal issues for homebuyers trying to finance a pool home with USDA. This was especially an issue here in Florida due to the amount of pool homes.
- USDA has eliminating their 30% site – land value requirement. USDA used to cap or limit the land value to 30% of the total site. If the home/lot size is typical for the area, and NOT income producing in any way, it should be ok
- Homes located in flood zones are not permitted assuming the homebuyer can obtain eligible flood insurance.
- Household income limits in regards to eligibility: Working full time students only need to include a max of $480 income to the overall household income, regardless of how much they make. Since most students are still dependants, this $480 in income will often be offset by the $480 dependant deduction. Please remember USDA household income limits apply to ALL members of the household that generate income, even if they are NOT on the loan application or qualifying. Read more about 2023 USDA income limits here.
Please be sure to check out the video of changes here. Also insure you bookmark our BLOG here to stay up to date. Homebuyers should also take some time and read the USDA Frequently Asked Questions here for tons of helpful information. Please be sure to call us at 800-743-7556 with questions about the application process.
Serving Lakeland, Sarasota, Fort Myers, Naples, Summerfield, Ocala, Lady Lake, Tampa, Orlando, Jacksonville, Lake City, Fort Walton beach, Destin, Pensacola, Santa Rosa – USDA RD New 3555 Rule & Guideline changes