Wednesday, June 25, 2008

USDA wants to put people in their own homes

Evelyn Cronce El Defensor Chieftain Reporter

Socorro County residents could qualify for low-interest home loans through a government program designed to accommodate families in rural areas.

Art Garcia, of the United States Department of Agriculture Rural Development, recently spoke to a group of lenders and realtors and private citizens about the Rural Development guaranteed mortgage program for single-family housing.

The federal definition of a rural area is an area with a population of less than 20,000 people. That definition covers all of Socorro County including the city of Socorro. That means low interest USDA loans either directly or through a qualified lender can be used for home purchases in both the city and county of Socorro. All guaranteed loans are 30-year fixed rate loans.

Income limits to apply for the loans are defined as 115 percent of the median income for the area. A single person with an adjusted income of $24,200 a year qualifies for a low-income loan. A person with an adjusted income of more than $24,200 a year but less than $49,550 would qualify for a moderate-income guaranteed loan. A family of four would qualify for a low-income loan with an adjusted income of $34,550 and for a moderate-income guaranteed loan with an adjusted income of $70,750.

U.S. citizenship is not required but legal immigration status is required. Non-citizens are covered under the Systematic Alien Verification for Entitlements Program.

Garcia said the qualifications for the loans are somewhat flexible.

"If you (the lender) have an applicant with a credit rating of 620 or higher, it's OK. If it's lower, that doesn't mean the loan is rejected. It just means we will need to look closely at the applicant to make sure he or she is not overextending themselves," he said.

Garcia also said a bankruptcy in the last two or three years does not automatically disqualify an applicant. Credit does not have to be determined by credit cards or major payments. The USDA will accept non-traditional credit determinations from things like cell phone companies or utility bills. Self-employment is not a disqualifying situation either. He said people in any of these circumstances will be looked at on an individual basis.

Garcia said the process has been significantly streamlined in the past few years. Prospective home owners may apply for the guaranteed loans through a participating lender. He said the way to find out if a lender is participating, the buyer needs to ask either the lender or the realtor. Garcia said the loans are written for 100 percent of the appraised value of the property.

"If a house is assessed at $100,000, the loan from the government is for $100,000," he said.

Garcia said the lender would have to work in closing costs because there are no provisions in that amount for extras like closing costs. Also, the lender will be required to put two percent of the loan into a loss reserve account instead of traditional mortgage insurance.

People who meet the lower income qualifications may apply for a direct loan from the Rural Development program.

Although the USDA Rural Development office in Socorro is not open, there is a representative to help out every Tuesday from 8 a.m. to 4:30 p.m., in the club room at the Socorro Village housing complex. He said the Socorro Housing Authority has been generous enough to allow them the use of that facility.

For additional information, Garcia can be reached by calling 404-761-4973 or by e-mail to arthur.garcia@nm.usda.gov. More information can be found on the Internet at www.rurdev.usda.gov/rhs/sfh/brief_rhguar.htm.

"We just want to give people the opportunity to get into a house," Garcia said.

ecronce@dchieftain.com

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