USDA loans, also known as Rural Housing Service loans, are guaranteed by the U.S. Department of Agriculture and designed to help low- to moderate-income borrowers purchase homes in eligible rural areas. This comprehensive guide will walk you through the essential steps and forms required to efficiently process USDA loans in Encompass 360.
Getting Started with USDA Loans in Encompass
- Encompass provides a full suite of tools and forms specifically designed for originating USDA (Rural Housing Service) loans.
- Encompass offers a recommended workflow that can be adjusted to meet your specific business needs.
- Lenders can create loan templates with predefined data for USDA loans to further streamline the process.
Completing the Loan Application
- Begin by accessing the Rural Assistance URLA (Uniform Residential Loan Application) tab in Encompass.
- Fill in any missing information in the Types of Mortgage and Terms of Loan, Property Information, and Applicant Information sections.
- Ensure you select “USDA-RHS” for the Loan Type on page 1 of the application.
- Complete additional loan, housing, and property information on page 6 to qualify for Rural Housing Service assistance.
Verifying Income and Underwriting
- Use the VOD (Verification of Deposit), VOE (Verification of Employment), and VOL (Verification of Loan) forms to verify the applicant’s income.
- Complete the Income Worksheet to calculate the applicant’s annual income and monthly repayment income.
- Access the 1008 Uniform Underwriting and Transmittal Summary form to record essential underwriting information.
- Utilize the Subordinate Financing button if there’s a secondary source of financing for the loan.
Managing USDA-Specific Requirements
- Access the USDA Management form, which serves as a central hub for managing USDA-related information.
- Use the Tracking tab to record important dates and information, including the Government Underwriting System (GUS) decision.
- Complete the Req for SFH Loan Guarantee/Resv. Of Funds tab to populate crucial USDA Rural Development forms.
- Fill out the Loan Closing Report tab to generate the Guaranteed Loan Closing Report.
Ordering Essential Services
- Use the Order Appraisal feature on the Services tab to request an appraisal for the property.
- If configured, select an appraiser you’ve previously located using the Appraisal Lookup button on the FHA Management form.
- Order a flood certificate by clicking the Order Flood button on the Borrower Summary – Origination input form.
Finalizing the Loan File
- Ensure all required forms are completed and accurate, including the 1003 Loan Application and 1008 Underwriting & Transmittal Summary.
- Double-check that the loan type is set to “USDA-RHS” in the Loan Type section of the Borrower Summary.
- Order a credit report using the Order Credit button on the Borrower Summary form.
Leveraging Encompass Features for Efficiency
- Take advantage of data flow between forms to reduce manual data entry and potential errors.
- Utilize the Income and Repayment Income Worksheet output form, which is automatically populated from the Rural Assistance URLA.
- Explore the possibility of creating custom loan templates for USDA loans to save time on future applications.
Looking for more information on USDA loans in Encompass 360 or need help with implementing any technology solution within Encompass 360, leave us a message.
