HomeBridge is pleased to announce the following enhancements to USDA programs.
Payment Shock
HomeBridge will now consider loans with payment shock on an exception basis (currently not allowed). USDA considers payment shock a risk layer when:
• The DTI is > 29%, and
• The new PITI payment is > 100% of the borrower’s current housing payment or the borrower does not have a housing payment history.
There cannot be any additional risk layers and there must be strong, documented compensating factors (cash reserves, high credit score, etc.) for payment shock to be considered.
NOTE: Payment shock is calculated as follows:
• Proposed PITI divided by current housing/rent payment minus 1 multiplied by 100 equals the % of payment shock.
Site Value
HomeBridge will consider site value that exceeds 30% in the state of Hawaii only on an exception basis subject to the USDA guidelines detailed below:
• It is typical for the area, and
• Comparable properties with similar acreage is provided, and
• Appraiser confirms the lot cannot be subdivided into two or more separate parcels.
These changes are effective immediately, and apply to both new submissions and loans in the pipeline.
The USDA Purchase and Non-Streamlined Refinance Program, Streamlined Refinance and Rural Refinance Pilot Program guidelines have been updated with this information and posted on the HomeBridge website at www.homebridgewholesale.com.
If you have any questions, please contact your Account Executive.
