Introduction to Government Agency Loan Programs

Transcription

1 Chapter 7 Introduction to Government Agency Loan Programs 1 Chapter Objectives Identify basic qualifying standards for FHA-insured loans. Define the use of upfront mortgage insurance premiums. Recognize different loan programs available through the FHA. Identify basic qualifying standards for VA-guaranteed loans. Define eligibility and entitlement for veterans. Describe other government agency loan options. 2 True or False? FALSE FALSE FALSE FALSE FALSE Determine whether the following statements about FHA loans are true or false: 1. FHA is a primary lender. 2. FHA builds houses. 3. FHA sets interest rates. 4. FHA loans are only for low-income borrowers. 5. FHA loans target first-time homebuyers. 3 1

2 Federal Housing Administration FHA insures mortgage loans made by approved lenders No have income limits Eligibility: U.S. citizen Permanent resident Non-permanent resident with qualifying work visa Sets maximum mortgage amount FHA part of Department of Housing and Urban Development (HUD) Oversight through HUD s Office of Housing 4 FHA: Participants Lenders must be approved Direct Endorsers can underwrite and close loans without prior FHA review Homeownership Centers process and oversee selling HUD-owned homes (foreclosure or deed in lieu of foreclosure): --Philadelphia --Atlanta -- Denver -- San Francisco 10 regional offices Managed by regional administrator Local field offices 5 FHA: Limited Denial of Participation Limited Denial of Participation (LDP) Action taken by HUD Field Office or Deputy Assistant Secretary for Single Family or Multifamily Housing Excludes person/company from participation MLOs must check LDP list GSA Lists of Parties Excluded from Federal Procurement or Nonprocurement Programs MLOs must check for suspensions/disbarments 6 2

3 FHA: Underwriting Standards Underwriters consider 4 C s: Credit history of the borrower Capacity to repay the loan Cash assets available Collateral Must pay off any outstanding court-ordered judgments Cannot be in default on any federal loan Confirmed throughcredit Alert Verification Reporting System (CAIVRS) database Must have sufficient income to service all debt Qualifying ratios somewhat more liberal 7 FHA: Underwriting Guidance HUD Housing Handbooks Mortgage Credit Analysis (4155.1) Lender s Guide to the Single Family Mortgage Insurance Process (4155.2) Mortgagee Letters Communicate program changes, commentary, and other critical information to lenders and MLOs Archive of current and previous Letters, number sequentially by year 8 FHA: TOTAL Scorecard Technology Open to Approved Lenders (TOTAL) Mortgage Scorecard Mortgage Credit Analysis Automated underwriting system developed by HUD Evaluates creditworthiness based on: * Credit score * Loan-to-value ratio * Monthly housing expense * Loan term * Payments in reserve Indicates recommended level of underwriting and documentation: Accept/Approve Eligible for FHA endorsement Refer Requires lender to manually underwrite FHA denies no borrower solely on TOTAL Scorecard risk assessment 9 3

4 FHA: Payment to Effective Income Relationship of borrower s total monthly housing expense to income, expressed as percentage More commonly referred to as the housing expense ratio Total mortgage payment (PITI) may not exceed 31% of gross stable monthly income $3,200 Stable monthly income x.31 Housing expense ratio $ 992 Maximum monthly housing expense 10 FHA: Debt-to-Income Relationship of borrower s total monthly debt obligations to income, expressed as a percentage Includes housing and other long-term debts that will not be cancelled Back end ratio given primary consideration by TOTAL Scorecard Borrower s total expenses cannot exceed 43% of monthly income 12 FHA: Compensating Factors If applicant exceeds either 31/43 ratio, lender must document factors that mitigate risk: Housing expense ratio Down payment Accumulated savings Previous credit history Compensation/income not reflected in effective income Minimal housing expense increase Substantial cash reserves Substantial non-taxable income Potential for increased earnings Primary wage-earner relocation 14 4

5 FHA: Property Eligibility Eligible one- to four-family dwellings include: Detached or semi-detached dwellings Row houses Multiplex dwellings Individual condominium units (if approved) Some manufactured housing Independent utilities and other facilities must include: A continuing supply of safe, potable water Sanitary facilities and a safe method of sewage disposal Heating adequate for health and comfort Domestic hot water Electricity for lighting and equipment 15 FHA: Property Conditions Must meet minimum property standards (MPS) for new construction or minimum property requirements (MPR) for existing Appraiser recommends needed inspections: Infestation/evidence of termites Inoperative or inadequate plumbing, heating, or electrical systems Structural failure in framing members Leaking or worn-out roofs Cracked masonry or foundation damage Drainage problems 16 FHA: Property Conditions Lender requires repairs necessary to: Protect health and safety of occupants Protect security of the property Correct physical deficiencies or conditions affecting structural integrity 17 5

6 FHA: Property Occupancy Must establish bona fide occupancy as principal residence within 60 days of signing mortgage Must live in the house for at least one year Generally may have only one FHA loan at a time Non-occupying co-borrower limits LTV to 75% unless: Family member Someone with documented evidence of long-term relationship separate from loan 18 FHA: Maximum Mortgage Amount HUD limits the maximum loan amount by community (county, zip code, or metropolitan statistical area) Loan amounts reviewed every 3 years 2012 loan limit for most single family = $271,050 Different limits for 2-, 3-, and 4-family Higher limits in some areas Current schedule of maximum limits available here: 19 FHA: Minimum Required Investment 3.5% minimum required investment of sales price or appraised value, whichever is less 10% minimum required investment for credit score less than 580 Closing costs may not apply to 3.5% Entire minimum investment may be non-repayable gift from relative, employer or labor union, charitable organization, close friend with clearly documented interest Gifts may NOT come from interested third party Requires signed gift letter stating no repayment required 20 6

7 FHA: Secondary Financing Government or approved nonprofit second lien permitted Total loan cannot borrower ability to pay Individual/company second lien permitted with prior approval if: Secondary financing disclosed at application Minimum cash investment is not financed CLTV does not exceed FHA mortgage limits, Borrower can make payments on both Any periodic payments are level and monthly No balloon for first 10 years No prepayment penalty 21 FHA: Seller/3 rd Party Contributions Seller and/or third party limit 6% of sales price or appraised value, whichever is less Permanent and temporary interest rate buydowns Borrower must qualify at note rate for temporary Mortgage interest for fixed rate Mortgage payment protection insurance or UFMIP Contributions above limit are considered inducements Must be subtracted from sales price before applying LTV 22 FHA: Assumption and Prepayment Loans prior to 12/15/1989 assumable with small fee No alienation (due on sale) clause Original borrower liable unless FHA agrees To assume loans endorsed on or after 12/15/1989: FHA creditworthiness review Fee Assumption without approval may accelerate debt No prepayment penalties allowed Lender may collect remainder of month s interest if not paid on the first of any month 23 7

8 FHA: Mortgage Insurance Premium Required for all FHA loans Upfront (UFMIP) On or after 4/9/2012 = 1.75%loan amount Monthly MIP based on LTV and type of loan 30-year loan 1.20% if LTV <= 95% / 1.25% if LTV > 95% May be paid in cash at closing Borrower, seller or third party (within limits) More commonly financed into loan up to 100% LTV Automatically cancelled at 78% LTV (1/1/2001) Must have been paid for 5 years on 30-year loan Borrowers may make additional principal payments Financed MIP cannot be cancelled 24 FHA: 203(b) Loans Loan Program Description Conditions Section 203(b) Home Mortgage Insurance Basic owneroccupied loan for one- to four-family dwelling Any term up to 30 years, fixed 3.5% down Maximum 1% origination fee Requires UFMIP (1.75% as of 4/9/12) and monthly MIP up to 1.25% of loan balance Max. loan amounts $271,050 to $729,750 (location) 25 FHA: 203(k) Loans Loan Program Description Conditions Section 203(k) Rehabilitation Home Mortgage Insurance and Streamlined Limited Repair Program Purchase/rehab existing one- to fourfamily dwelling Loan for existing debt+repaid costs Allows 110% LTV Bring property into FHA compliance Structural / additions not allowed on Streamline Section 203(k) Occupy within 6 months Min. $5,000 / Max. None 203(k) Streamline Occupy within 30 days Min. None / Max. $35,

9 FHA: 234(c) Loans Loan Program Description Conditions Section 234(c) Condominiums Available for condo projects approved by FHA based on owner-occupancy and other criteria Same eligibility as 203(b) 27 FHA: 251 Loans Loan Program Description Conditions Section 251 Adjustable Rate Mortgages 1- to 4-family Interest rate reflects weekly average yield U.S. Treasury Securities + margin 1-, 3-, 5-year ARMs: 1% annual adjust after initial fixed 5% lifetime cap 7-, 10-year ARMs 2% annual adjust after initial fixed 6% lifetime cap Only 30-year terms allowed Requires additional disclosures Borrower must qualify at second year interest rate 28 FHA: 255 Loans Loan Program Description Conditions Section 255 Home Equity Conversion Mortgage (HECM) Allows homeowners age 62 or older to convert equity in home to a monthly stream of income or line of credit Requires UFMIP (2.00%) and annual premiums of 1.25% HECM saver initial MIP is.1% Loan must be repaid when borrower sells, dies, or does not live in house for 12 consecutive months 29 9

10 FHA: 184 Loans Loan Program Description Conditions Section 184 Indian Home Loan Guarantee Program Specifically for American Indian and Alaska Native families, tribes, Alaska Villages, or tribally designated housing entities 2.25% down required for loans over $50, % down required for loans under $50,000 No monthly MIP One-time, 1% loan guarantee fee 30 FHA: Energy Efficient Loan Program Description Conditions Energy Efficient Mortgage Program Finance cost of adding energy efficient improvements (purchase or refinance) May be used with the 203(k) Rehabilitation program Same eligibility as 203(b) 31 FHA: Good Neighbors Next Door Loan Program Description Conditions Good Neighbors Next Door Program Qualified civil servants Assists in foreclosure purchase Purchase price as low as 50% loan balance As little as $100 down Requires occupancy, sole residence 32 10

11 FHA: Disclosures Disclosure Purchase Re-Fi Amendatory Clause Real Estate Certification Important Notice to Homebuyers For Your Protection (inspection) Informed Consumer Choice FHA ARM Disclosure Release of Liability FHA Borrower Authorization Identity of Interest Certification FHA/VA Addendum Hotel/Transient Usage SSN Verification Form 33 Mortgage Exercise 7-1 Borrower Stu wants to get an FHA loan for a home priced at $253,500 and appraised for $257,000. The monthly PITI payment on this house would be $1,780. He has a 680 credit score, gross monthly income of $6,850, other monthly recurring debts of $850, and $75 monthly electric bill. Stu will finance the 1.75% UFMIP into the loan. Assume that the FHA maximum loan amount for the county is $271, Mortgage Exercise What is borrower Stu s debt-to-income ratio? Based on the information provided, do you think this loan can be made? Why or why not? The borrower s total monthly debt is $2,630 ($1,780 + $850). Remember that utilities are not included as part of the debt ratio calculation. Divide that by gross monthly income of $6,850 to give him a total debt-to-income ratio of 38%, which is below the 43% FHA guideline. His credit score is acceptable and the sale price of the home is below the county loan limit, so yes, this loan can probably be made

12 Mortgage Exercise What is the required minimum investment Stu must make to buy this home? What is the total loan amount? (Round to the nearest dollar.) The minimum investment Stu must make is 3.5% of the sale price or appraised value, whichever is lower, so the minimum down payment is $8, ($253,500 x 0.035), making the base loan amount $244,628 (rounded up). The UFMIP is $4,281 ($244,628 x.0175). Since he s financing that, add it to the base loan amount for a total loan amount of $248,909 (rounded). 36 Mortgage Exercise Would Stu be allowed to obtain secondary financing on this home to make the down payment? While borrowers can obtain secondary financing on FHA loans, it cannot be used for the required minimum investment. He could use a non-repayable gift for that, however. 37 Mortgage Exercise What would be the prepayment penalty if Stu pays off the loan early? $0.00; there is no prepayment penalty allowed on FHA loans, though the lender could require Stu to pay interest for the month if the loan is not repaid on the first on the month

13 VA-Guaranteed Loans Guaranteed by federal government through the Veterans Benefits Administration Part of the Department of Veterans Affairs Help meet housing needs of eligible veterans Owner-occupied single family 1-to 4-unit multifamily if vet occupies one unit as principal residence Rarely loans money directly Approved lenders and Automatic Endorsers Lender s Handbook: 39 VA: Eligibility Based on continuous active service Spouses of vets who died on active duty or MIA/POW may be eligible Certificate of Eligibility (COE) issued by VA with proof of service: DD-214 discharge papers NGB Form 22/23 Statement of service 40 VA: Entitlement/Maximum Loan Guaranty limited to 25% lesser of purchase price or established reasonable value Entitlement documented in COE Vets may generally purchase home up to 4 times entitlement with no down payment Annual loan limit set by county Most counties $417,000 in If entitlement insufficient or limit exceeded: Eligibility + down payment + equity must = 25% 41 13

14 VA: Restoring Entitlement Eligibility may be restored and used for another VA loan if: Property is sold and loan paid in full Eligible veteran assumes outstanding balance and substitutes his/her entitlement Must meet occupancy, income, and credit requirements 42 VA: Qualifying Standards Must be satisfactory credit risk with means to repay loan If legally married, spouse income may also be considered Non-married co-borrower not allowed unless also an eligible vet occupying as principal residence Housing expense ratio (front end) not considered Debt-to-income ratio should not exceed 41% Tax-free income may be grossed up to calculate 46 VA Loan Qualifying A veteran with a family of three who lives in the Midwest is applying for $114,000 loan and has the following income and debts: Gross Monthly Income: $1,950 Primary Employment Part-time Employment $2,590 Total Income Expenses: $ Expected Housing Expense (PITI) Car Payment Student Loan Revolving Credit Account $1, Total Expenses $1, $2,590 = 0.42 or 42% total debt-to-income ratio 47 14

15 VA: Residual Income Income remaining after subtracting taxes, housing expenses, recurring debts Ensures adequate cash flow for family support Uses net effective income, not gross Considers size of veteran s family Requirements determine regionally based on loan amount 48 VA: Property Guidelines Eligibility: Existing home (occupied or completed at least 1 year) New build with warranty, protection, or veteran-built Some manufactured homes Must meet minimum property requirements (MPR) Establishing reasonable value Appraisal reviewed by VA, issues reasonable value: Notice of Value Certificate of Reasonable Value Lesser of reasonable value or sales price defines maximum mortgage amount Occupy as primary residence within 60 days 51 VA: Variable Funding Fee No upfront or monthly mortgage insurance premiums Must pay one-time non-refundable variable funding fee at closing Waived for disabled veterans and some surviving spouses May be financed (added to loan amount) or paid in cash 52 15

16 VA: Closing Costs Reasonable and customary amounts When to third party, must be actual charge Lender may charge flat fee not to exceed 1% Must be refunded if loan does not close May not be charged commission, brokerage fee or buyer-broker fees May not pay other closing fees (e.g., interest rate lock, tax service, notary, escrow) Seller, lender or other third party may pay unlimited closing costs 53 VA: Seller Concessions Anything of value added to transaction that seller does not customarily pay, for example: Funding fee Prepaid property tax/insurance Permanent buydowns Payoff of other credit balances Closing costs/points typically paid by seller are not considered concession Seller concessions over 4% reasonable value are unacceptable 54 VA: Secondary Financing Simultaneous secondary financing permitted Cannot be in substantially worse position than if entire amount guaranteed by VA 2 nd loan must be subordinated No cash-back Must qualify for 2 nd mortgage as recurring monthly obligation Interest rate on 2 nd mortgage may not exceed industry standards 2 nd mortgage should not restrict ability to sell any more than VA 1 st mortgage 55 16

17 VA: Assumption and Prepayment Loans closed on/after 3/1/1988 require VA / lender approval for assumption Vet is released of liability in event of default Eligibility may be restored if: Assumer is an eligible veteran Assumption has been approved Assumer agrees to substitute entitlement and occupy as principal residence Prepayment penalties are prohibited May be allowed for secondary financing 56 VA: Purchase Loans Program Description Conditions Purchase Loans 100% financing for 1- to 4-family Loan terms negotiated Repayment plans: Fixed Traditional ARM Hybrid ARM Graduated payment Growing equity Owner occupy as primary residence 25% guaranty Entitlement Down payment Equity Non-refundable funding fee Lender flat 1% fee 57 VA: IRRRL or VA Streamline Program Description Conditions Interest Rate Reduction Refinance Loan (IRRRL or VA Streamline) VA-to-VA (reuse entitlement) Available to Original vet Surviving spouse New vet w/substitute entitlement Must: Lower interest rate Shorten loan term Change ARM to fixed Certif of prior residency May add up to $6,000 energy efficiency No cash out May pay for allowable closing costs, fees, up to 2 discount points 58 17

18 VA: IRRRL or VA Streamline Program Description Conditions Cash-Out Refinancing Proceeds may pay off other liens or taken as cash (lender approve) Can convert non-va to VA loan Vet must have sufficient entitlement Certif of primary residency First lien Max. loan amount is 100% of sum of: Appraised value Energy efficiency improvements VA funding fee 59 Comparing FHA and VA Loans Borrower eligibility Property units Owner-occupant only Maximum loan (cannot exceed appraisal) FHA Any qualified borrower 1-4 Yes within 60 days Cannot exceed maximum for geographic location VA Eligible veteran only (COE and DD-214 or equivalent) 1-4 Yes within 60 days No limits 65 Comparing FHA and VA Loans Borrower qualifying standards Lender protection Maximum interest rate FHA Housing expense ratio: 31% Total debt-toincome: 43% Insured to full extent of losses from default Negotiated with lender VA Residual income guidelines Total debt-toincome: 41% Maximum guaranty amount = 25% loan limit/county Negotiated with lender 66 18

19 Comparing FHA and VA Loans Minimum required investment/down payment? Fee/insurance premium required FHA 3.5% if FICO 580 or above 10% if FICO UFMIP 1.75%; monthly MIP up to 1.25% of annual average loan balance VA None unless loan amount is greater than 4 times COE entitlement Variable funding fee 1.25% to 3.30% (unless disabled); no insurance premium required 67 Comparing FHA and VA Loans FHA Fee financed? Yes (UFMIP) Yes VA Closing costs financed? Seller contribution limit? No Yes, 6 points (proposed reduction to 3) No Discount points: No limit (if reasonable) Seller concession: 4 points 68 Comparing FHA and VA Loans Secondary financing? Assumable loan? FHA Yes, except minimum down Payment Not without FHA creditworthiness Check Yes Prepayment penalty? No No VA Not without VA/ lender approval 69 19

20 USDA: Rural Development U.S. Department of Agriculture Rural Development Housing and Community Facilities Programs (HCFP) Grants and loans to rural communities for essential services Assist with single family and multifamily Housing Site preparation Rental assistance Water and waste Repair and rehabilitation Low-income homebuyers in rural communities Small towns up to 20,000 Temporarily eligible in response to conditions, natural disaster 70 USDA: Section 502 Loans Guarantees loans made by approved private lenders Makes direct loans if no local lender is available May be used to: Purchase existing home Construct new home Renovate or repair existing home Relocate existing home Purchase and prepare site Eligible house must be modest and not exceed the applicable area loan limit Applicants must meet area median income (AMI) income requirements 100% LTV with no mortgage insurance 71 USDA: Section 502 Loans Effective October 1, 2011, USDA mortgage insurance rates are: For purchases, 2.00% upfront fee paid at closing, based on the loan size. For refinances, 1.00% upfront fee paid at closing, based on the loan size. For all loans, 0.30% annual fee, based on the remaining principal balance. Note that the annual fee is for the life of the loan. It does not end with the loan-to-value reaches a certain point as with an FHA loan

21 Key Term Review Area Median Income (AMI) Automatic Endorsers CAIVRS Department of Veterans Affairs (VA) Direct Endorsers Federal Housing Administration (FHA) Funding Fee Mortgage Insurance Premium (MIP) Rural Development TOTAL Scorecard 74 Summary 1. Government financing Real estate loans that have been traditionally insured or guaranteed by government programs Occurs at the federal level and should not be confused with government sponsored enterprises active in secondary markets Government agency programs include FHAinsured, VA-guaranteed, and USDA Rural Development guaranteed and direct loans 75 Summary 2. FHA insured loans Owner-occupied single family and multifamily dwellings of 4 or fewer units, made by approved lenders Require lower down payments and less stringent qualifying standards than conventional loans Direct Endorsers can underwrite FHA loans FHA sets a maximum mortgage amount, depending on the geographic area 76 21

22 Summary 2. HUD issues regulations for FHA loans: 1. Required minimum investment 3.5%lesser of purchase price or appraised value (10% for credit score ) 2. UFMIP required (1.75%for most purchase and refinance as of 10/4/10); monthly MIP on annual average loan balance up to 1.25%); may be cancelled when original value reaches 78% LTV 3. Assumable with lender approval for loans on or after December 15, Prepayment penalty not allowed, but lender can require pay off be made on due date or collect an extra month s interest 5. Items paid by seller are negotiable, but seller contribution limited to 6 points(proposed reduction to 3 points) 77 Summary 3. VA-guaranteed loans: Help eligible veterans buy homes No down payment Veteran must occupy home VA does not limit home price Limits guaranty amount to 25% maximum loan limit in county 78 Summary 3. VA loan rules: 1. Borrower needs DD-214(discharge papers) and COE (Certificate of Eligibility) 2. VA issues Notice of Value(NOV) or Certificate of Reasonable Value(CRV) based on appraisal; if price exceeds estimate of reasonable value, veteran must make up difference with down payment/equity 3. Secondary financing may be permitted 4. Required variable funding fee, paid in cash or financed; waived for disabled veterans; lender flat fee limited to 1% 5. No limit on seller contribution to closing; 4%limit on seller concessions 6. Assumable by eligible vets with VA approval 7. Prepayment penalty not allowed 8. Vet may restore entitlement if loan paid or assumed by eligible vet who substitutes entitlement 79 22

23 Summary 4. Rural Development Agency under the U.S. Department of Agriculture(USDA) Offers various assistance programs for both businesses and homebuyers in rural communities Small towns and areas hit by natural disasters Housing and Community Facilities Programs Section 502 loans for single family homes either Guarantees loans made by private lenders Makes direct loans if no local lender is available Eligible borrowers can get 102% financing(2% financing fee) Section 502 Guaranteed Loans income of up to 115% of the area median income(ami) Section 502 Direct Loans very low (below 50% AMI) or low (between50%and80%ofami)incomes 80 Chapter 7 Quiz 1. A borrower with a FICO score of 700 applies for an FHA loan on a house with an appraised value of $100,000 and a purchase price of $96,000. What is the required minimum investment? A. $3,000 B. $3,360 C. $3,500 D. $4, Chapter 7 Quiz 2. An upfront mortgage insurance premium is required A. on all FHA loans. B. only when the buyer cannot pay the required down payment in cash. C. only when the LTV exceeds 80%. D. only when the LTV exceeds 90%

24 Chapter 7 Quiz 3. Which statement about FHA-insured loans is FALSE? A. FHA loans are intended for low-income first-time homebuyers. B. FHA loans have less stringent qualifying standards. C. FHA loans require low down payments. D. FHA offers an adjustable rate mortgage. 83 Chapter 7 Quiz 4. To qualify for an FHA loan, a borrower should have a maximum housing expense ratio of and a total debt-to-income ratio of A. 28%; 36%. B. 29%; 36%. C. 29%; 41%. D. 31%; 43%. 84 Chapter 7 Quiz 5. FHA-insured loans are funded by A. approved lenders. B. the Department of Housing and Urban Development. C. the Federal Deposit Insurance Corporation. D. the Federal Housing Administration

25 Chapter 7 Quiz 6. The VA provides guaranty on eligible home loans for up to of the loan amount. A. 10% B. 25% C. 50% D. 100% 86 Chapter 7 Quiz 7. A veteran s entitlement for a VA loans is specified in what document? A.COE B.CRV C. DD-214 D.NOV 87 Chapter 7 Quiz 8. What is the maximum flat fee that a lender may charge on a VA loan? A. 3.5% B.2% C.1% D.There is no limit; the fee is negotiable

26 Chapter 7 Quiz 9. Full VA entitlement can generally be restored to a veteran A. if any disabled veteran assumes the loan. B. if an eligible veteran substitutes his entitlement for the seller s. C. when the loan is paid down to below 50% LTV. D. under no circumstances. 89 Chapter 7 Quiz 10. The VA may use what document to determine the maximum loan amount on the property being used as collateral? A. county tax assessment roll B.DD-214 C.notice of value D.sales contract 90 Chapter 7 Quiz 11. Section 502 home loans are administered by which federal agency? A. Department of Housing and Urban Development B. Federal Housing Administration C. Federal Housing Finance Agency D. U.S. Department of Agriculture 91 26

27 Chapter 7 Quiz 12. A buyer wishes to purchase a home in a designated rural community where the area median income is $50,000. What is the maximum LTV allowed for a Rural Development Section 502 guaranteed loan? A.80% B.90% C. 100% D.102% 92 27