Single family housing guaranteed loan program (SGBP) is one of the most popular and successful home loan programs available to borrowers in the country – is set to undergo some serious changes over the next few years. With the impending changes, which are expected to take effect in July, the end user of SGBP will need to read through the following Important Note carefully: The Single Family Housing Guaranteed Loan Program, or the Single Family Guaranteed Loan, as a Supplement to the Department of Housing and Urban Development’s (HUD’s) National Manufactured Housing Construction Loan Program, (SMICLP), has been expanded.
Effective immediately, the SFHGLP will no longer be available as a stand alone program to finance single family residences (SSRs). Effective immediately also, the SFHGLP will no longer be able to be used as a method to finance affordable multifamily residential properties.
Single Family Housing Guaranteed Loan Program
Current guidelines established by HUD have required that all qualified applicants (and their agent) apply to the SMICLP, either through the local or state lender, and not through the SGBP. In essence, for an individual to be eligible for a guaranteed loan under the single family housing guaranteed loan program guidelines, the borrower must apply to the SGBP, not through the local or state lender. This change was initiated to prevent the abuse of the system by lenders who may submit applications only to approved lenders, and then funneling money through out-of-state or non-domestic approved lenders to pay for properties that were not priced within the approved guidelines.
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For homeowners in areas with lower than normal housing costs, and lower than the national average income limits, the Department of Housing and Urban Development’s (HUD’s) Single Family Guaranteed Loan program offers a great opportunity to get a loan, even if income limits are only achieved. Although the maximum amount of money a borrower can borrow is still $75000, there are opportunities for a borrower to borrow amounts in excess of that amount. A portion of these funds will be used to cover origination fees paid by the lender to the SGBP, and a portion will be used for the property assessment fee.
The definition of a “permanent” loan under the single family housing guaranteed program is one that will be in effect for a minimum of five years. As the name implies, the borrower must reside in the property for which financing is being sought for five years in order to qualify for this program. In addition, lenders will not be permitted to finance a loan to a borrower until the borrower has owned the property for one year. To qualify for a “temporary exception”, a borrower must be residing in the property for more than five years. In this instance, the borrower will be considered to be a “short-term” borrower. However, if the borrower is still within the five year period of the “permanent exception”, they will be considered to be a “long term borrower”.
In order to be considered a “long-term borrower” in this instance, the borrowers must have an ownership interest for at least one year. The way that the lenders define a “short term” borrower is that the borrower must have a loan on a residential property. Lenders use a five-year rule to determine whether or not a person is a “short term” borrower. Lenders use the age of the borrower as one of the main criteria for determining if they will make a loan to them.
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The process of obtaining a guaranteed loan can be a challenge for many people. The real estate market has experienced such a dramatic drop over the past two years that it is understandable that some lenders have had a difficult time getting back to their feet. However, with today’s lending requirements, there are a number of creative ways for those who might have difficulty fulfilling lending requirements to get a loan for purchasing a home. While some may think that they do not meet lending requirements, there are actually several different options that will allow them to get a guaranteed loan for purchasing a single family house. In order to find out what type of options are available in your area, contact a mortgage broker today.