Ocean City Today
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Ocean Pines retains status for rural home loan program

By Brian Gilliland | Apr 05, 2018

(April 6, 2018) Having completed its five-year review of areas eligible for its rural home loan program, the United States Department of Agriculture has decided Ocean Pines is still rural enough for inclusion.

Worcester County Commissioner Chip Bertino, representing Ocean Pines, asked the Coastal Association of Realtors’ President Bernie Flax and Sarah Rayne, government and public affairs director about the status of the review this week, and they said the USDA had decided to continue the program in Ocean Pines.

Rayne said she received an email from Brad King, the single-family housing director for Delaware and Maryland for the USDA, confirming the program’s continuation.

In February, the commissioners voted unanimously to send a letter to the USDA in support of the program.

The USDA loans are attractive to homebuyers and lenders because a portion of the mortgage is guaranteed by the federal government, giving lenders more confidence in the ability of the applicant to repay the loan. This confidence also plays out in the interest rate, which is favorable to the buyer and also allows the home to be financed completely without a down payment being required.

There are, however, some restrictions involved. The basic requirements are credit, income, property usage and home location.

While there is no minimum credit score required for USDA loans, those with scores above 640 are eligible for automated underwriting, which is faster among other benefits, and those below that threshold have to submit to manual underwriting — a longer and generally more thorough process.

As for income, the USDA must establish a verifiable income stream that is likely to continue, and as the loans are intended for low-to-moderate earners it sets a base income limit at 115 percent of the median household income for the area.

The loans are also intended for use in rural areas, but the definition of rural in this context is intentionally vague, and according to the USDA, includes almost all of mainland Worcester County. All of Ocean City, coastal areas of West Ocean City on south to South Point are excluded, according to current rules.

Finally, the home in question must be used as a primary residence, have direct access to a street and must have adequate utilities including water and wastewater disposal.

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