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Frequently Asked Questions for Partnership for Homeownership
Additional Home Loan Questions
How is Rural Development
involved with these loans? Rural Development provides the borrower with a second mortgage that is typically a significant percentage of the purchase price. We provide the first mortgage not to exceed 50% of the purchase price. As the WHEDA lender, what do
I do for the borrower? What does Rural Development do? Rural Development determines the borrower's eligibility for the Rural Development loan as well as the WHEDA Home loan. As the lender, you'll add the WHEDA forms to the application package, make disclosures for the WHEDA portion of the loan to the borrower, send the application to us, and take care of the WHEDA loan closing documents. Does Rural Development only make
loans in certain areas? Rural Development targets rural areas, which they define as areas with populations of 20,000 or less. The application package I received
from Rural Development is made up of copies of the documentation. Don't
I need to send original documents to WHEDA? You only need to send us the copies forwarded to you by Rural Development. Rural Development retains the original documents. The credit report I received
in the application package from Rural Development doesn't have credit
scores. Do I need to order another credit report? We accept the credit report from Rural Development without credit scores. You do not need to order an additional credit report. Who coordinates the closing?
Should I obtain a separate title insurance policy for the WHEDA loan? To eliminate duplication of efforts, you are responsible for coordinating the closing with Rural Development at a title insurance company. Obtain a joint title policy with each organization listed and their respective loan amounts, etc. If the title insurance company will not issue a joint policy, obtain a title policy for the WHEDA loan. Does the Rural Development
partnership allow down payment and closing cost assistance from other
sources? Yes, the borrower may take advantage of other sources of down payment and closing cost assistance. Contact WHEDA (1-800-334-6873) if you are unsure if a particular down payment assistance program is acceptable. Who escrows for taxes and insurance?
The WHEDA payment appears to include only principal and interest. Rural Development will escrow for the real estate taxes and hazard insurance. Their payment, not WHEDA's includes the monthly amounts for these escrows.
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