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NEW CONSTRUCTION -- Prior to issuance of the loan note guarantee, lender must certify that the following certifications, inspection reports and warranties have been obtained by the lender and are satisfactory:
Construction Inspections -- Certification that foundation, framing and final inspections have been completed in compliance with local and state requirements and codes.
Builder's 1 year Warranty or 10-year Homeowner's Warranty -- If 10 year warranty is provided, the foundation and framing inspections a waived.
Permits and Clearances
Notice of Occupancy and Certification of Occupancy
Well and septic certifications for local health authority or private licensed firm.
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EXISTING HOMES |
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All existing homes ( 12 months or older ) must be structurally sound, functionally adequate and placed in good repair prior to the issuance of USDA's loan note guarantee. The following documentation and certifications must be submitted to USDA Rural Development prior to the issuance of the loan guarantee:
For All Existing Homes:
Termite report and clearance (Section 1 items to be cleared. Section 2 items to be completed only when a health and safety is issued.)
Signed certification from qualified inspector that the home meets the requirements contained in USDA Rural Development " Existing Home Certification ". Inspection completed by individual determined qualified by lender. Also acceptable is a Valuation Condition (VC) Form prepared in accordance with HUD Handbook 4150.2 for existing home inspection compliance.
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REMOVAL OF THERMAL STANDARDS FOR EXISTING PROPERTIES |
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An evaluation of average California energy costs, as well as current data from state utility companies and building contractors has resulted in significant reduction in the thermal standards required for all existing properties in California financed with the Guaranteed Rural Housing loan program.
An analysis of this data has determined that, in most cases, the cost to add insulation and other energy efficiency improvements may actually increase the cost required from the home buyer beyond the expected savings from the energy improvements.
Therefore, the necessity to meet specific thermal standards is waived for all existing properties in the state of California. The supplemental "Thermal Certification" is no longer required.
It is the lender's responsibility to pay careful attention to the quality of the existing properties being financed with the Guaranteed Rural Housing loan program and insure that these properties have been inspected and certified to meet the requirements for existing homes established in HUD Handbook 4150.2 and 4905.
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SITE REQUIREMENTS |
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Site value should not exceed 30% of the total appraised value.
Well certification and septic certification required when applicable.
Streets and roads servicing the property should be paved, or must have an all-weather surface. Properties must have access to a street or driveway.
Condo's and PUD projects must be served by a Homeowners Association which is in control of the project and has been approved by HUD, VA, Fannie Mae or Freddie Mac.
No restrictions on the size or design of the dwelling.
Homes in flood zones must obtain adequate flood insurance coverage and be above the 100 year flood evaluation, unless property receives a Letter of Map Revision from FEMA.
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