Welcome back everyone sean stevens here again with metroplex mortgage services and another usda loan pro video quick tip so what repairs can be financed with the usda loan wow thankfully i have great news to report usda guidelines were recently updated and now allow a wider range of possible repairs and in today’s video i’ll explain how it can be possible
To finance home repairs with the usda loan along with eligible types repair scenarios also if you’ve not yet done so please download our usda blueprint for success with a link below this educational resource helps break down the usda process step by step and is great for both realtors and homebuyers alike ok let’s get started with the good news previous usda
Guidelines include both roof and plumbing repairs as specific examples that could not be escrowed and repaired after closing however updated usda guidelines now permit a wider range of eligible repair types which no longer specifically restrict roof or plumbing repairs eligible types repairs would include but are not limited to plumbing flooring air conditioning
Units and also roof repairs and any type of repair that does not affect the livability or safety of the home repair costs are not allowed to exceed the lower of either 10% of the proposed loan amount or $10,000 in addition a contractor invoice will be required for all repairs no self-help allowed the repair work is to be complete within 30 days after closing
The appraised value must be high enough to support the new loan amount with repairs repair funds are then taken from the loan and escrowed at closing the term escrowed means being able to deposit the repair money into a third party’s account usually a title company or closing attorney where it will be held post closing until further instructed by the lender to
Disperse the funds also there will be a required 50% deposit of the total repair cost do at time of closing this is allotted to cover any potential cost runs and can be from either the buyer or seller i may not be financed after successful completion of the required repairs are documented by a final inspection and approved by underwriting release a funding from
The tonneau company for contractor funds and the 50% deposit occurs in summary we are not talking about the fha 203k program or any type of full-blown renovation loan instead through the ability to finance home repairs with a usda loan it allows for an escrow repair option which can pinpoint specific repair items and allow them to be financed into a usda loan
Now i realize we covered a lot today and even though not all lenders specialize in usda loans because of our unique experience and expertise with the usda program we were able to help homebuyers make the most of their qualifying ability as a top-ranked usda approved lender we are here to help so just call or email to discuss your scenario and let us show you
The metroplex difference as always i want everyone and make it a great day and look forward to seeing you right here for the next tip of the week
Transcribed from video
USDA Update! – What repairs can be financed with a USDA loan? By Metroplex Mortgage Services
