- 03:15: Understanding the array of services offered by the USDA direct program
- 09:42: Importance of financial counseling for prospective homebuyers
- 15:28: Navigating property inspections and addressing repair needs (15:28)
- 21:05: Impact of the program’s services on closing timelines and homeownership success
- 26:18: Long-term benefits and community impact of the USDA direct program
- Contact Number: 843-801-1874
- Email Address: kwine@exitlowcountry.com
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- Instagram: https://www.instagram.com/wines_amazing_homes
- Contact Number: 843-619-3005
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- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
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CORWYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes to any of that, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made. The purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology provide you with the tools you need to start and build your successful real estate career. Call Exit Realty Lowcountry Group today at 843-619-3005, that’s 843-619-3005 or visit join.exitlowcountry.com and make your exit today.
So good morning and great morning to you guys. Hey, welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I’m your host Corwyn J. Melette, broker and owner of Exit Realty Lowcountry group in beautiful North Charleston, South Carolina. Hey, If this is your first time listening to this show, you sir or ma’am are in for a treat. Because our mission here at Exit Strategies Radio Show is very simple. That is to empower our community through financial literacy and real estate education guys, we are legacy-building right here. That is what we do. Those are the building blocks guys of our future legacy building, that is what we do. All right. So guys, look, I want to give a quick shout-out to all the people who tune in to us faithfully here in the Charleston market, those who catch us when they’re coming and going and passing through the area. I hear so much from you guys, that you’re enjoying the content and joining the conversations that will bring it to bear and on air to deliver to you unprecedented education in the real estate realm. All right, that’s what we’re doing here at this show. Guys, look, we’ve been having the best and today is no different. All right, we’ve been bringing you amazing guest speakers and amazing people who are sharing what they’re doing not only in their business but also encouraging. So today what we’re doing, and this is no new fly. So this is a little bit new format that you guys are seeing, but this is our resident expert series. So when you see these videos, when you hear this content, I want you to know that you are witnessing a resident expert meaning they are with us here at Exit Realty Low Country group. Are they a part of the Exit Realty family? Our resident experts so today guys, I’m very honored. I’m very esteemed, I’m very humbled to look here to have with us none other than Kashonna Wine with Exit Realty Lowcountry Group, Kashonna, how are you doing today?
KASHONNA:
I’m alright, how are you?
CORWYN:
I’m incredible. Thank you for asking. I just want to tell our listeners a smidgen about you, you’re a Charleston Native, right?
KASHONNA:
I am a Charleston native originally from John’s Island, North Charleston for a while and never left my family’s from drawdown.
CORWYN:
So when you got here in North Charleston, and wouldn’t let you go. Kashonna, one you are. And for our listeners, guys, I want you to understand some things when I talk about our people and house our culture here. And our belief very simply is that we want agents who are committed to helping and serving people who lead with their hearts. First business is business, don’t get me wrong. Nonetheless, we want to make sure that we’re leading with a heart that we’re setting out to help and serve people because we understand that when you serve when you give, then will be given on to because shall not be my opinion, to be very transparent, you exemplify that. So thank you for being who you are. But if you don’t mind, what attracted you to real estate to begin with?
KASHONNA:
So I love helping everyone and I sit down and I talk with my mom. And she was like, why don’t you try real estate? While going to college? I do have apparently with the teachers trying to get me to do real estate paralegal. So she was like, why don’t you find real estate?
CORWYN:
So you jumped in? Okay. So you have become around our office our go-to and a resource for a particular program. And this particular program on occasion, listeners, I know that you guys see people who put on workshops and seminars for you know, I’m familiar with the program. I’ve been around a little while. So I’ve done several transactions over the years, but you have become this expert in this because you are out to the place where you are more hands-on than probably most other agents that I know anywhere. And as it relates to. So tell our listeners what program I’m talking about.
KASHONNA:
You’re talking about the USDA direct program, I went and took the packages, Lance, I can understand more of the program or what they’re looking for, and understand the process a lot more.
CORWYN:
Okay, so the USDA direct program for our listeners, guys, is the 502. I think it’s 502B, isn’t it? 502 program, which is in the code of the Rural Development Program, the USDA, this one little section of a program that deals with homeownership in rural areas, right? So what is the purpose of this particular program?
KASHONNA:
The purpose of this program is to provide home ownership to those who won’t necessarily get home ownership with traditional lending. This program helps very low-income, family members get into homes and helps with subsidizing the mortgage payments by either extending the years you’re in a mortgage or providing some type of subsidy.
CORWYN:
So basically, it is and please forgive this for our listeners, but please forgive this. But basically, it’s affordable housing in the country. Is that right? Pretty much. Okay, so you’ve touched on a few different things for our listeners, guys, I want to make sure that you guys get a fundamental, and we’ll get a little bit into some of the things that are required along with the program, etc. But this is against someone who’s looking to live in what is classified as a rural area. So for the Charleston area, give me some examples of what areas are considered to be rural.
KASHONNA:
Corona, Hollywood, some parts of Johnstown, which are ripping away pretty fast because of the building, you got Ridgeville, Knightsville, Orangeburg, Utah, Walterboro, definitely Walterboro. Okay. Areas like that.
CORWYN:
One of the things that USDA considers is the census tract, so the population in a given area, and if there’s more density of what have you been imaged given area, then obviously that area is not going to be considered to be rural. Is that correct?
KASHONNA:
Correct.
CORWYN:
Okay, okay. That makes perfect sense. So let’s talk about the program itself, what kind of house can someone buy, and still qualify?
KASHONNA:
What is considered to be a modern house in that area? You said square footage, restrictions are no longer any restrictions on it. You can now get a call, but your insurance has to fit within the guidelines that are provided for you to get that.
CORWYN:
So what I just heard you say, my cousin was saying this thing to me when he was planning to move here from New York. He referred to say, I want to come down south I want to get one of many McMansions. So it ain’t quite a McMansion, but it can be a nugget to a McMansion, is that about right? That is priceless. So right now under this program, they’re looking at. So the modesty piece that you refer to, is not based on the size of the house anymore, as much as it is. On the price of the home, am I
correct?
KASHONNA:
The price and size, say for instance, you have a family of four, but you see this house that you want two bedrooms, and just says you have three kids, two boys, and a girl, you can’t buy a two-bedroom house, because on the side your price range, you still have other requirements that need to be looked at. And some people might say, well, it’s too bad when my kids are moving out there, looking at what you need now, and then we can figure it out in the future.
CORWYN:
Okay, all right, that makes perfect sense. So this process for USDA is somewhat, and I don’t want to frame it as being tedious. Tell me if I’m wrong, but it’s a rigid process or a direct process, if you will, pardon the pun, but it is still a process to get through pretty easily. Once you understand what you have to do. Am I correct? Okay, so let’s talk about that. What does that look like?
KASHONNA:
So you have your application process, you either can do it with the package or you can do it with the USC direct right now there is currently a backlog. So you’re looking at anywhere from three months to a year and you need to collect all papers if you’re using a package or if you have a USDA loan specialist directly. Keep your check stubs and bank statements in your constantly only because it’s going to help them get through the process faster. And also, if you don’t get a timeline attendees say I need this done. If you don’t get it attendees, then you’re either put to the bottom of the stack, or they put you in as ineligible to get the loan, you have to start all over from scratch. If you have cash apps and stuff, be willing to write a letter explaining where these cash apps are going, or why, because they want to know, hey, if I give you this house, and even though I’m helping you with it, are you going to be able to afford this house with all the extra money coming in or coming out? And they also don’t want to be like, Okay, well, you have a side business that put you over the income limit, because you have all these cash apps coming in. So that’s one thing I always say is to keep an eye on what’s going in and coming out at your accounts, because you are going to have to write a letter of explanation, explaining what these transactions
CORWYN:
That right there probably will take me over a little bit. And for listeners, guys, we got to swing out a little bit, and we’ll call right back in. But the reason why are referred to you as a resident expert on this is because not only do you know that, but you sit down with consumers with their bank statements, hey, let’s go through here. Because look here, if you’re not the gas man and your cash out, or whatever it is, let’s be real. But you got this in your cash app where you sending people money, for whatever you might be sending the money for. That needs to be factored into your budget. And that is a constant thing. Or maybe you are the person who’s receiving the cash apps, if that’s a constant thing, then that needs to be considered because to be very direct about it, you may be over the income for eligibility, or on the other side of it, you may not be able, you may not be able to afford homeownership, because you’re putting out so much money in whatever habits or hobbies or whatever it is that you have. Is that fair? Okay, what do you suggest that people do to offset overcome that? No more gas.
KASHONNA:
If you don’t need it, and you’re looking to purchase a home, let’s cut it office for a second. I know everybody likes the $2,500 here dues, we buying a house, and you may be able to afford it. But when you’re asking for other people’s money, they want to know, hey, it’s going to be my house payment versus this 500 to look at. You have to be realistic. Because if you had somebody coming to borrow 300,000, or better from you, would you want them to be able to show hey, I can pay this back and I know how to prioritize? So that’s basically what it is
CORWYN:
what I just heard you say is if you get your head down the $500 needs to sleep upright for about six months. That’s about right. Six months. Yeah, let’s keep slipping straight off. Okay, okay, I got it, I got it. So this process, that’s one of the first things that you do is
you so you start playing all the information. So you collect the income information on the front of him, pay stubs, tax returns
KASHONNA:
Tax returns, return credit reports, you do need your credit scores, and you can go about getting it multiple ways by paying for it, or trying to get it to the freeway, which will take longer, and I’m trying to build a checklist
CORWYN:
Okay, that’s the application fee for it. That’s the credit check, credit check fee. Okay, it’s the credit check fee,
KASHONNA:
and bank statements, tax returns, and check stubs.
CORWYN:
Okay, bank statements are in there, because we want to make sure you’re collecting this information on pay stubs. What do you need the month of pay stubs, two months of pay stubs
KASHONNA:
Supposed to be a month of pay stubs. If your hours aren’t consistent, I always tell them, to give me two months. So I can have an average or figure out about where you are versus Oh, well, this last month, you didn’t make any money, but you didn’t make money because maybe during the wintertime your job doesn’t work. So a lot of road workers won’t have consistent hours. During the wintertime, I had a client that had this issue. The job was switching hands and the old job just took some hours to do a thing to try and answer it just gave them the bare minimum to get work done. But now that the job has already switched hands or arms back where it needs to be so now the process continued versus a class having to put it at a stop and then start that change out.
CORWYN:
That makes perfect sense. So once all of this information is kind of gathered, if you will initially analyze and you as a packager, again is our resident expert. You go through and Okay, look at this low score, you may need this information to add to it. Then that gets submitted to USDA. Is that correct?
KASHONNA:
Correct it well. It has another layer of protection. It goes through another division and USC. That double-checks everything then it gets sent over to the pack under the car. The packager is going to enter this information and review it. Once they make sure everything qualifies post credit check and everything, they may ask you for updated check stubs, because if you had a big difference in hours, they want to make sure to Hey, are we still at 40 hours, 32 hours, however many hours you’re turning in, and they need to issue a certificate of eligibility.
CORWYN:
So that C O E, certificate of eligibility, all right? What does that look like from the agent side, which you are as well? But when we get that kind of serves as our pre-approval letter defines what information is in
KASHONNA:
It defines how much you’re approved for the amount your insurance and taxes should fall within, for the loan to be processed. What I always say is, we have no idea what assurances are in South Carolina, we can look up online and see the taxes, that’s the difference between a good realtor or just an EAC, what ends up happening is, you will get a purchase amount and you will go ahead and you would purchase in that price range what I have done with clients because I know taxes, they may give you $1,500 tax like being a wall to borrow, you may be able to find a property with 1500. But you may have 18 to 2000 a year of property tax. So what we do is we adjust the numbers to make it work. So if they tell you 3000, I might need to go towards Texas insurance, I have to have this insurance at 2000 and the taxes at 2000, then I need to find an insurance company that can give us what we need for 1000.
CORWYN:
Gotcha. So basically, it’s got gotta balance that out. So if your letter says in another way to put this for our listeners, guys, if your letter says Ted’s insurance, escrow should be this dollar amount per month, if you got one of the numbers a little bit higher than what you would need for the to fit, you need to figure out how you’re gonna offset the other number. Now, you have way more latitude on his shoulders than you do on property taxes. So you can shop the insurance companies, and change the coverage a little bit. And that’s the advantage of having someone who knows and is creative in their thinking. Because then, they can help you to navigate that process, maybe this particular insurance company, maybe it’s your favorite insurance company, that may not be the insurance company, that’s going to give you a better rate for this purchase. So you switch insurance companies get to the rate that you need, you can always change your insurance in the future. But when you qualify and close, you have to qualify and close where the numbers are. Because if you don’t, then you’re not going to qualify, which means that you’re not going to be able to close. Right? So we want to make sure that we have that correct. So altogether, you know, didn’t have a bad law currently. But once you got that COE which is we get that once we get that see, it’s time to look the house is fine. Okay, so let’s talk briefly about We already touched on modesty. So the size, price points, all that kind of stuff. What are the things that when you go looking for a house that you’re looking to do a USDA direct purchase on? What does that look like? And what I mean, is the condition of the house, what condition does the house needs to be?
KASHONNA:
It needs to be in livable conditions, what I can say from experience, plumbing, electrical, and roof, are their main concern. If it’s written in an inspection report, it’s going to have to be checked. It’s going to have to be tested, you have to get a specialist out another thing, roof, it looks or if it’s not of age, meaning 10 years or younger, they may require for that roof to either be inspected by a roofer, just to make sure you’re not moving into the home and have to turn around and make a $10,000 or 10,000 or beta repair for within the first two, three years.
CORWYN:
So one of the things in that if our listeners and maybe your seller, right, maybe your seller, you got a buyer that was brought to you trustful you’re working with an agent’s you got someone who is governing, managing your transaction, your side, and this agent, perhaps on the other side, maybe they bring a buyer in. That’s what they’re looking for. I asked him for the reason is USDA’s job as a direct funder, and we want to make sure that you understand they are a direct funder. That’s what they do. They are funding this loan directly with government dollars. It is not a mortgage process. It is hey, this is the money boom. Here you go. There it is right there. So when that’s happening, they are looking to make sure that the consumer is in good shape. Because if they have a year later now barring a catastrophe of God, major, etc. Barring that, if something were to happen to that roof it fails just simply out of mere age and our consumer now has that significant expense, they may not be able to make the mortgage payment, and then they may default and the default, then that’s a whole nother thing. So that’s what they’re trying to avoid. So that’s something you guys need to consider. But then on the other side, one thing for those of you who are looking for a specialist, someone who is familiar with and knows the process, one of the things you want to– that’s the advantage of having your agent, that’s the advantage because they know that going in when they walk the property looking at it, we might have an issue a problem here, we may need to figure out if we can address this on the front end. So we don’t get tied up in the transaction and find out later that was stuck.
KASHONNA:
I do want to clarify something for someone, it doesn’t have to be a three-year-old. They don’t want any shingles missing. They don’t want a little paperweight spot, if you use my inspectors the walkthrough to make sure, hey, we may not have fun with this. But if there are any issues they do.
CORWYN:
Good, let’s say got approval, we found house, we’re on the way to closing, we got inspections, and we’re good with inspections. What does the rest of this process look like?
KASHONNA:
making sure the paperwork is signed making all the documents are updated. So they’re going to ask for more check stuff just to make sure you ain’t put your job in none of the process. It’s just like traditional blended, but it’s more scrutinized and makes sure their investors protected
CORWYN:
Good deal. So one of the things Kashonna, I think that you’ve had this, I know we talked about it around the office at times this program, where it is as far as where it’s laid out in the government and stuff, when there are issues with the budget and all that kind of stuff when they can’t get that stuff together. Let’s find something to knock on right here. So that won’t happen. But when that happens, does that impact the ability to be able to close if you’re a buyer in a transaction,
KASHONNA:
It does what I’ve done personally, is we don’t do 45-day closing, I start at 55 days. And I always like to agent though, because a lot of agents aren’t aware of the program or what the program all entails. So I let them know, hey, if funding is put at home for any reason, my government’s back first and again, they’re broken, or money ran out, we’re just waiting on grants to come in, hey, I may need an extension for 10 to 15 days because I have to wait for friends to be entered. But do know when the funds are in. My client is on the list. And her funds will be approved as soon as the funds are available. Okay,
CORWYN:
All right. So technically, while there could be a delay, once funding is made available, again, the process is very quick, it’s not gotta go back to underwriting. It’s just a matter of, hey, this loan is sitting here, this is ready to fund as soon as the money is available, here’s a check, or here’s a wire to the opposing attorney. And they can go ahead and get in and get everybody to sign and get close.
Okay, okay. So what are for our listeners, guys, look, this one, you may need to pick up on the other side, because we want to make sure that you guys get this information. All right. So please make sure that you go to our website and Exit Strategies Radio Show, I want you to look for this episode, I want you to listen to it in its entirety, or pick up where quote unquote, where we are right now, just in case because again, we are getting towards the end. But I want to make sure I ask this question of you because I don’t want to leave it to let it linger. When people are considering programs such as the 502 USC Direct, what’s the advantage in doing so,
KASHONNA:
the advantage is for the income brackets. I said the advantage was homeownership. Traditionally, if you can’t pay a 23 3,000 monthly payment, you could come to get the same house and possibly pay 12 1500 because of the interest rate. One is the interest rate that’s always worth in what’s national out there on the market. I think just being able to purchase that room.
Normally won’t be
CORWYN:
It’s an advantage. So I’m gonna speak this, but those who may know or know locally Patty’s file found the first president of Carolina. She’s been seeing this thing and the context around me and some meetings and stuff that we’ve been in about her hand-up, not a handout. So this is an opportunity to put a handout and lift someone in the homeownership who may not have been able to achieve it. But let’s go on the other side. Because we have to talk about the pros, we have to make sure we mention the cons. So what is the cause? Is there anything that you can think of? That would be okay, this is why you may not want to do this program.
KASHONNA:
I wouldn’t say it’s so much of a con but I would see it as something that needs to be spoken about, there is a recapture at the end of the life of the loan if you receive a subsidy. If, for instance, every mile your mortgage was supposed to be 1200, but you’re only paying 300. So you have about 400 in subsidy is a formula that they use to calculate that. And you may have to pay to say they say all right, we provided you with 4000 and a subsidy out of line for your own. But whatever the reason is, just to keep numbers clear, you need to pay this back is not per se what they gave you for they have a whole formula that depends on their appreciation of the house and how much is in it so it’s a formula that they use
CORWYN:
The reality is that a program allows someone who otherwise may not be able to call him on the ability to be able to qualify make a whole purchase and begin to build and accumulate wealth. So it starts that process for many people over the years I’ve had people and if you don’t mind the last USDA direct person that you closed and then what their mortgage payment was roundabout
KASHONNA:
Without subsidy, 12.
CORWYN:
What was their purchase price on the home
KASHONNA:
364
CORWYN:
So legitimately it is saving people money on their purchases. Now the only caveat let’s be fair listeners gotta get it.
KASHONNA:
With the subsidy, they’re only paying about eight nine so
CORWYN:
it’s a subsidy of paying less than $1,000 a month current on a 300 and some odd $1,000 home and that was within that’s been within the last 12 months when interest rates have been reduced.
Okay, for our listeners guys look it you gotta get this right. So understand you gotta buy in a rural area. So you ain’t using it somebody in West Ashley downtown Charleston, my in Mount Pleasant in North Charleston, right in Summerville, stuff like that, you get further outside of those areas too and everybody’s situation is unique. There’s no one-size-fits-all. So let’s be very fair and clear on that as well. So someone wants to explore this program because they have some questions. How do they get in contact with you?
KASHONNA:
You can contact me at 843-801-1874 you email me at kwine@exitrealtylowcountry.com whether you contact me or not, follow me on Facebook Kashonna Wine at Exit Realty Lowcountry Facebook page, and Instagram.
CORWYN:
Okay, so y’all know how to get it. So remember, our resident expert on USDA Direct, the 502 program guys, look here, as I’ve said to you guys for several years, but those who know me those who see me in the street, we do this for real over here not for play. So please reach out to Kashonna so she can get you on the path to homeownership. So we can take you from “I wanna” to “I gotta”. So Kashonna always asked us about our traditional guests here on the show. And I don’t want to out I’d be remiss if I didn’t also ask that of you. And I refer to this as a mic drop question is that thing that if you had known this, when you first started or back yonder, when whatever that may have been, and this is in relationship to your business? What would you have done differently? You know, hindsight is always 20/20. So if you knew then what you know, now, what would you have done back that would have changed the trajectory of your business
KASHONNA:
I would have offered this program because I had some clients before I specialized in this program, and then understood how to help them. So me I would have studied this program with a lot more understanding basically, I want to use this format.
CORWYN:
Interesting. Interesting. So you already got on this bandwagon, educated yourself. And all the things that you special, work in a specialized and miss this as an offering to consumer and client base, you would have started this in the beginning versus within the last 12-24 months. That is interesting. That is a good start. So, guys, look, you’ve been tuned in to the Exit Strategies Radio Show. Again, this is our resident expert series. Again, Kashonna Wine, thank you so much for being on the show with us today. Thank you. You’re quite welcome. So please make sure that you reach out to Kashonna for all things USDA direct. She’s your resource. That is what we do. Guys, look here, y’all know how I feel. Ya know what I say? Ya know, I always put the two of those things together like this, and I say it to you this way, which is I love you. I love you, I love you, and we gon see you guys out there in those streets.
