David Krushinsky

Recently, a prospective buyer applied for an Arizona USDA Rural Housing Guaranteed loan. This applicant met all the criteria to obtain an Arizona USDA Home Loan in terms of credit, income requirements, and property location. The loan was sent to the underwriter and DECLINED. The reason for decline – “We cannot certify the applicant’s inability to secure credit from another source”. OUCH…… So the borrower actually has too much money in the bank and can afford to make a 20% down payment to obtain Conventional financing.

Here is an excerpt for the rules as stated forth for Arizona USDA Rural Housing Guaranteed loans and applicants with too much loot:

Conventional credit has long referred to loans not guaranteed or insured by the Federal Housing Administration (FHA), the Veterans Administration (VA), or the Rural Housing Service (RHS). When 7 CFR Part 1980, Subpart D (and the corresponding RD Instruction 1980-D) was promulgated in the early 1990′s, a conventional loan was universally recognized in the housing industry as one where:

• the applicant was able to make a 20 percent down payment; and

• the applicant was able to pay all closing costs out of pocket; and

• the applicant’s total debt ratio was 36 percent or less; and

• the applicant’s debt ratio for principal, interest, taxes and insurance (PITI) was 28 percent or less; and

• the applicant had a good credit history consisting of at least two credit bureau trade lines open and paid as agreed for at least a 24- month period, to include that:

1. the applicant was not currently 30 days or more past due on any trade line; and
2. the applicant had not been 60 days or more past due on any trade line over the past 24 month period; and
3. the applicant did not have a foreclosure or bankruptcy in their credit history over the past 36-month period; and

• the conventional mortgage loan term was for a 30-year fixed rate loan term without a condition to obtain private mortgage insurance (PMI).

Liquid assets for conventional credit down payment purposes typically consisted of cash or cash equivalents. Cash or cash equivalents included funds in the applicant’s checking or savings accounts, or investments in stocks, bonds, mutual funds, certificates of deposit, and money market funds, unless they were encumbered (pledged as collateral) or otherwise inaccessible without substantial penalty. Cash equivalents typically did not include funds in Individual Retirement Accounts, 401 (k) accounts, Keogh accounts, or other retirement accounts that were restricted and may not be accessed without incurring substantial monetary penalties.

PHOENIX HOME BUYER FOUNDATION PROGRAM

Helping families rebuild the foundation after suffering from a foreclosure or short sale.

What is Phoenix Home Buyer Foundation Program?

Phoenix Home Buyer Foundation Program was founded on the idea to assist people in purchasing a home again and help stabilize home prices in the Phoenix community at the same time. Phoenix suffered significant losses to property values and home equity. Bringing qualified homebuyers back into the Phoenix real estate market will enable the values to steady. The Foundation Program helps people with a previous foreclosure or short sale interested in purchasing, do so, in the shortest amount of time required.

How does the program work?

We will analyze your credit and develop a strategic program to put you in the best position to purchase a home in the least amount of time. We will help you in determining your first eligible date of purchase. We will also review your debts and develop a financial budget to help keep you on track.

What is the cost?

There is no cost for this program.

How will I know when I can purchase a home?

Our program provides a personal countdown clock that you will always have access so you will know the exact amount of time before you can purchase.

How often will I hear from you?

We will communicate with you quarterly until you are 12 months away from purchasing. Once you are 12 months away from purchasing, we will communicate with you monthly. 60 days prior to your first eligible purchase date, we will review your current financial position. One month prior, we will request updated financial information for your prequalification and refer you to one of our preferred real estate partners. On the day you are eligible to enter into a purchase contract, we will send you and your real estate agent the prequalification letter.

How do I get started?

Getting started is easy. You can email david@dkhomeloans.com and request the form to get started.

If you know someone with a previous foreclosure or short sale that would like to purchase a home, please have them give me a call.

I get a lot of phone calls from blogs I've written about financing a home connected to a shared well with more than 4 homes using a FHA loan. Many people find my article on Google titled, "Are You Buying A House In Arizona With A Shared Well Connected To More Than 4 Homes". Most of the time, the buyers lender will not finance the home, but I am often able to assist them with financing. In many cases, the buyer has the exact scenario outlined in the blog.

I'm only licensed in the State of Arizona to originate mortgage loans, but I often receive calls from across the nation. Believe it or not, many states have the exact same problem with shared wells and FHA loans. I usually try to help the loan officers I receive calls from in other states by paying it forward.

I received an email this morning that made my day. Here's what it said:

Hello David,

I promised that I would get back to you about my nightmare situation regarding shared wells and FHA.

We finally went out to all 4 duplex properties to figure out which property was on which well. We had prior permission from all the tenants and owners to enter the properties. The buyer, seller and realtor for the subject property accompanied me, along with an electrician and a well installer. Long story short, despite there being two wells, all 4 properties were on one well and one pump. This came as a surprise to everyone. There was a second well on the property adjacent to the subject, but that had been shut off with a curb stop some time before. The seller looked at the costs of reconnecting to the old well and paying for a shared well agreement and decided it was just cheaper and faster to drill a new well on the subject property. That was done on Friday and we're just waiting for the water quality test. A local engineering company did the site plan for us by updating an old plan they had done previously. The seller paid for the well and the buyers paid for 2 hours of time for the inspection of the electrician and well installer.

By the way, this involved a lot of standing outside in near zero temperatures in a foot of snow. It just goes to show what can happen when everyone involved is working towards the same goal!

Thanks for taking the time to talk with me.

Marcia Robinson Loan Officer

Merrimack Mortgage Company, Inc.

221 Main Street, Suite 202
Nashua, NH 03060
Tel: 603-821-5184 ext. 203
Fax: 603-821-5188
www.MortgagePlannersNE.com

License Number NH163093

That's awesome! Perseverance will lead to great things. Thanks for sharing your story Marcia.

Section 8 Housing - 3 Credit Hours Fair Housing

In this class you will get a deeper understanding of Section 8 Housing and valuable information that will assist you while working with your clients.

This class will cover:

• The complete process of participating as a landlord

• Pitfalls and concerns to watch out for

• How to make Section 8 Housing work for you and your clients

• Helpful landlord tips

• And Much, Much More!!!

Class Time : Tuesday, February 8th 1:00pm to 4:00pm

Location: Keller Williams Arizona Realty 9500 E. Ironwood Drive, Suite 101 Scottsdale, AZ 85258

RSVP to Kristen: Direct: 480-339-1576 or kristen@dkhomeloans.com with your name, company, phone & email

Continuing Education Credit Hours Offered by Arizona Academy of Real Estate 10207 North Scottsdale Road • Scottsdale, AZ 85253 AZRE License #S05-0009 • 480-991-0182

I received a phone call today from a real estate broker that I have worked with over the last few years. I have some very loyal clients that I've done many loans for when they have purchased homes in Phoenix. These clients actually found her after I had pre-approved them. They have purchased a few homes with her, where I provided financing. Her and I get along really well and I enjoy working together. She called me today about a client she had previously referred. The conversation started like this:

Hi Dave! You remember those clients I referred to you that where moving from Texas to Arizona? You spoke with them and took their information over the phone. You also asked them to send you paystubs, so you could verify their income. I had one of my agents take them out to look at homes. They didn't want to send their paystubs, so she referred them to another lender that did not require them to issue an pre-approval.

I didn't have a chance to do the loan..... because I asked for paystubs to verify they were qualified??? Why would any agent not want to know that their clients were in fact qualified?

Well Dave.. they put an offer on a home and it was accepted. We ordered the termite report and it came back 4 weeks ago. Now we are ready to fund, but the lender is telling me she can not fund because they do not have a clear termite report. It has "water damage" listed as being on the property. Have you ever had this problem?

Yes! Yes, I have and I would have prevented this from being an issue about 3 weeks and 6 days ago by simply reviewing the report when it was originally completed. So, I tell her how we worked around this issue on a transaction we had the same problem on a year ago.

It's a double edge sword.......Ask for too much documentation and your buyers go to someone else. Don't ask for enough and your transaction falls apart at the 11^th hour. I would prefer to lose the buyers and keep my integrity.