Nevada Bond & Rural Development Loans: An Easy-To-Understand Guide

Guest Interview: Cory and I meet over lunch to talk about NV Bond and Rural Development Loans. 

(Note: this article is not meant to encompass all the nitty-gritty details about these programs. Our hope is that through Cory's insights we can all learn something new and hopefully help you in your decision-making. But I tried my best to include resources with the topics we discussed.  If something is not clear to you or would like to know more, you're more than welcome to call me directly (Joe: 775-338-7653) and I will do my best to help you or recommend someone who can.)

NV Bond Program

• Is a first time home buyer's  program

• In order for borrowers and clients to use the NV bond they must've taken the first time home buyer's class. (FHA and VA does not matter if you're a first time home buyer.)

• NV bond program must be a first time homebuyer. Well that's not exactly true. If you haven't owned a home in the last three years, you are eligible.  The test is you have to provide the past three years record of taxes, and they will check if you have deducted any mortgage interest on your taxes in those years.

• For the right people it is a good loan. It's not a good loan for a first time homebuyer who will have large increases with their pay. You can actually lose your subsidy and re-audit you.

• Another drawback is that it must always be owner-occupied. That's the downfall of NV Bond always has to be owner occupied. You cannot use it to develop a real estate portfolio at all.
  

Additional Resources:

• NV Bond Program Overview (http://nvhousing.state.nv.us/bond_program/mfindex.htm)

• Homeownership Assistance: Nevada (http://www.hud.gov/local/nv/homeownership/buyingprgms.cfm)

Advantages of NV Bond

• It 'piggy backs' off the FHA or VA. It helps with down payment and closing costs. If you got a $100,000 purchase price you've got the $97,000 for the FHA loan while the NV bond loan is going to pay for the difference. It'll be on the 2nd position amortized over 20 years and there will be a $7,500 lien in the second position that has helped pay for your down payment and closing costs.

• It does not piggy back off conventional loans only FHA or VA.

Rural Housing or Rural Development loans

"Is committed to helping improve the economy and quality of life in all of Rural America"

• To be eligible for rural housing is based on geographic location.

• The cool part about Rural development is that if you have $100,000 purchase price but the appraisal came in for 103,000 you can have a loan amount of $103,000 and roll the $3,000 to the closing costs. That's the niche that RD has.

• And the underwriting actually is not much different from a regular FHA loan. Very similar. Good program.

Additional Resources:

• Rural housing loans(http://www.govloans.gov/govloans_en.portal?_nfpb=true&_pageLabel=gbcc_page_browse_loans&_
  nfls=false&bid=401&mode=report&currentSubType=6)
  

• Rural Development news and updates (http://www.rurdev.usda.gov/)