USDA Management

1. On the top of Page 1, select one or both of the checkboxes to indicate the sources of income used to qualify for the loan.

2. Type an Agency Case No.

3. If needed, type a unique Lender Case No to track the loan. (This value is different from the Loan Number.)

Section I. Types of Mortgage and Terms of Loan

1. Make three selections to define the type of mortgage: Loan Type, Lien Position, and Amortization Type.

   • For example: USDA, First, and Fixed Rate.

2. Complete the loan terms fields.

   • Total Loan Amt and Monthly Pmt are calculated fields. If you want to type a value in the Monthly Pmt field, click the Lock icon.

Section II. Property Information and Purpose of Loan

1. Type the Subject Property information and Legal Description, which is obtained from the Title Report.

2. Select a loan purpose.

   • If you select one of the construction loan options, complete the Construction Loan section.

   • If you select a refinance option, complete the Refinance Loan section.

3. Complete the Property will be, Title will be held, and Estate will be held in sections.

4. Select a Source of Down Payment.

   • If you click Other Type of Down Payment, type a description in the space provided.

Section III. Applicant Information

1. Complete the Applicant #1 information, including the Present Address, Mailing Address, and Previous Address sections.

• To add additional addresses, click Show All (VOR) to open the Verification of Residence form.

2. Complete the Applicant #2 information.

   • To copy information from the Applicant section, click Copy from Applicant #1. You can edit the copied information if needed.

Section V. Monthly Income and Combined Housing Expense Information

1. Type borrower and co-borrower gross income information in the Gross Monthly Income section.

   • To open a calculator to determine the monthly base income, click the Edit icon.

   • The fields in the Total column are calculated by adding the borrower and co-borrower values for each type of income.

   • The borrower's Net Rental Income (Net Rent Inc) is calculated from information in the Schedule of Real Estate owned. You can also click the Lock icon to lock the field and then type a value.

   • The second Other field contains totals of entries made in the Other Income section.

2. Type present and proposed housing expenses in the Monthly Housing Expenses section.

   • Present expenses are those associated with the borrower's primary housing.

   • Proposed expenses are those associated with the subject property's loan.

   • The Proposed first mortgage payment (First Mtg.) is calculated from information in Section I.

   • You can type proposed expense values or use the Edit icons to determine proposed expenses.

Section VI. Assets and Liabilities

1. At the top of the section, select a checkbox to indicate whether the assets and liabilities are for both the borrower and co-borrower (Jointly) or the borrower only (Not Jointly).

2. Type descriptions and current values for each type of asset.

   • The Total Bank Deposits value is imported from the Verification of Deposits form. Click Show All (VOD) to open the form and then add and edit deposit information.

   • The Real Estate Owned value is imported from the Verification of Mortgages form.

3. Click Order Credit to order a credit report and View Credit to view the credit report.

4. Click Import Liabilities to import information from the credit report to the VOL.

5. Add liabilities on the lines provided or click Show All (VOL) to add information to the Verification of Liabilities form.

   • New entries and updates on Page 2 are automatically updated to the VOL.

   • New entries and updates made on the VOL are reflected on the liability list on Page 2.

Section VI. Assets and Liabilities (cont.)

1. To update values in the Schedule of Real Estate Owned section, click Show All (VOM) to open the Verification of Mortgages.

   • Mortgages on the VOM must first be recorded on the Verification of Liabilities (VOL).

2. In the Additional Credit Received section, type other names under which the borrower has received credit, including the creditor's name and account number.

Section VII. Details of Transaction

Most of the fields in this section are filled from entries on previous pages or other forms, such as the Good Faith Estimate.

1. Use the four fields under line l to record additional credits due to the borrower.

2. Click the Edit icon open a calculator to determine upfront and monthly mortgage insurance and funding fees, if applicable.

Section VIII. Declarations

1. Answer the questions for both the borrower and co-borrower.

2. If you answered Yes to question m, complete subparts (1) and (2) as follows.

   • 1 - PR (principal residence), SH (second home), or IP (investment property).

   • 2 - S (sole ownership), SP (jointly with spouse), or O (jointly with another person).

Section X. Information for Government Monitoring

1. To print a previous year's application, select a corresponding checkbox.

2. If you are using Encompass 17.2 and later, select the Use 2018 DI checkbox to populate the 2018 HMDA reporting information data fields in this section of the form. This checkbox in enabled only when the Print 2009 Application option is selected.

3. If you are using Encompass 17.2 and later, complete the information that describes how the Demographic Information was selected

4. To the best of your ability, complete the borrower and co-borrower information regarding ethnicity, race, and sex.

5. If you are using Encompass 17.1 and earlier, select the method by which the application information was obtained and type the interviewer information.

6. If you are using Encompass 17.1 and earlier, the loan originator and company information is filled from the default information for the organization in which you are a member. Accept the defaults, right-click in one of the company information fields to open the Business Contacts window and select a different organization and its information, or manually change information as required.

Additional Information Required for RHS Loans

Text at the top of the form notes that the loan is a Section 502 loan type. Currently only Section 502 loans are supported in Encompass. Section 504 loans and grants are not supported.

1. Use the dropdown lists to indicate whether the applicant has previously obtained an RHS loan, is a relative of an RHS employee, closing agent, or closing attorney, or is a veteran.

2. If you indicate that the applicant is related to an RHS employee, agent, or attorney, enter the name and relationship in the text boxes.

3. In the Household Income section, enter the name and income information for each member of the household.

    Information entered in this section is used to populate the Income Worksheet (refer to the Income Worksheet section below) based on USDA income guidelines.

5. Select B or C from the B/C list to indicate that the household member is a borrower or co-borrower for the loan.

6. Select options from the Full time Student or Disabled list to indicate whether or not a household member is a full-time student or is disabled.

7. If applicable, use the Child Care Provider section to enter the name, address, and telephone number for a child care provider, and any weekly or monthly amount paid for child care.

8. In the remaining sections, select the options that describe the applicant's present housing situation, and enter the names of the applicant's present and previous landlords.

Much of the information displayed on the Income Worksheet is populated based on information previously entered on page 2 and 6 of the Rural Assistance URLA tab.

1. Click an Edit icon to edit the value in a field.

2. In the Annual Income Calculation and Adjusted Income Calculation sections, use the Calculate and Record fields to enter the values and formulas used to calculate the dollar amount for each line.

3. On lines 9, 10, and 11, enter the dollar values.

4. On line 13, enter the moderate income limit established by the USDA for the household. Click the Moderate Income Limit button to open the USDA Rural Assistance website to locate the limit.

5. In the Monthly Repayment Income Calculation section, enter the monthly income figures and calculations for the borrower and co-borrower.

6. In the Prepared By section, enter the name and title of the individual who completed the form.