topic Re: USDA Direct Loan funding in Mortgage Loans

USDA Direct Loan funding

Maine2012 — Wed, 26 Sep 2012 13:10:02 GMT

Is anyone else waiting for funding? I have been under contract since end of August. I was hoping to get funding with a pooling in funds at the end of September. Didnt happen. Now I am waiting for the third or fourth week of October per my Senator's office. This is crazy!!! Anyone else waiting???

Re: USDA Direct Loan funding

kans43 — Fri, 28 Sep 2012 03:04:01 GMT

I am also waiting on funding for the USDA Direct Loan. I have to agree with you it is crazy!!! Sounds like you, and I are in the same boat. I went under contract the first week of August.

Re: USDA Direct Loan funding

blacky77 — Sat, 29 Sep 2012 14:36:31 GMT

Same for us...pooling didn't do any good, waiting since Aug. Hoping the Senator's info was correct, have had 2 extensions from sellers, hoping they'll grant 1 more. Last we knew we were # 17 in line for funding nationally. Anyone else know where they are in line?

Re: USDA Direct Loan funding

kans43 — Sun, 07 Oct 2012 20:21:53 GMT

I don't know about nationally, but I called the Washington DC office. They told me to call my state office. When I spoke to KS office they advised me I was 1st on the list. I'm assuming this was for my state. They took down my number, and asked for my local office. They would call, and let me know when funds are released. It's out the USDA's hands until congress decides to release the funding. President Obama signed a CR Sept 28th. http://www.ruralhome.org/information-and-publications/hac-news/566-hac-news-september-26-2012

Re: USDA Direct Loan funding

kans43 — Tue, 09 Oct 2012 21:08:46 GMT

Just got off the phone with my Loan officer. Washington DC has released funds to USDA office in Washington DC 502 direct loan funding for disbursement should be here in a week. I just hope the sellers in my case will go for another extension.

Re: USDA Direct Loan funding

kans43 — Mon, 15 Oct 2012 22:19:09 GMT

I finally got my funding/closing commitment today. Wishing all who are waiting the best of luck.

Re: USDA Direct Loan funding

playedout — Tue, 16 Oct 2012 02:17:41 GMT

Thanks for the heads up! I'm still going through the application process (it sounds like I'll hear this week) but if the funds are flowing again the timing should work out perfectly for me.

Re: USDA Direct Loan funding

ruttster — Thu, 18 Oct 2012 03:38:50 GMT

I have not been contacted yet either. Submitted application and all paperwork on aug 15th. I hope we hear something soon.

Re: USDA Direct Loan funding

olythurst2012 — Wed, 21 Nov 2012 22:32:55 GMT

I would love to hear updates from folks on how the process has been/is going since these last posts! I am waiting to hear from USDA after being selected for processing and sending in my documentation (w2's, paystubs, etc). I am hoping to get a post up with more of my experience but am hoping to hear more about how the USDA Direct Loan experience is going for folks currently. Best and Thanks!

Re: USDA Direct Loan funding

olythurst2012 — Wed, 21 Nov 2012 22:54:06 GMT

OK, Here's my story, thought it might be interesting and maybe useful to some folks who are thinking of buying a home or are in the process.

I've rented the same place for over eight years and am ready to spend all that money investing in my own house, building equity, etc. I am considered low or very-low income by many of the HUD standards and do not any large savings or ability to come up with a down payment.

I started researching first time home buyer options, along with down payment assistance. This led me to a lot of reading and research online to find some programs here in Washington state to assist low income folks in becoming home owners. After some realizations that even with some down payment assistance (second mortgage, grants, etc), I would only qualify for around $75,000 ,which in my area, is well below anything on the market.

After continuing to work toward finding a way to make this all happen, I found the USDA loan programs and decided to go ahead and apply for the USDA Direct Loan. A couple of things, I am without a vehicle, work weekend night, and need to be able to get to and from work. So I need to be within a reasonable distance, say two or three miles of 'town'. Because the USDA loans must be used for homes in the designated rural areas, I've got a small window of area to find a home, but I'm determined. With the Direct Loan (provided I can get a 38 year loan, which I am within the income limits for) I am hoping for around a $130k loan, which I could work with.

Thanks for posting the link for the HAC newsletter! It seems like good news about the boundaries staying until at least March 2013 for what I need!

Another advantage of the USDA Loan, I don't need a downpayment (I do have a small grant of $5000 toward downpayment or closing costs) and I will probably qualify for the subsidy on the interest rate. I am hoping that buying now is a wise long term investment, particularly with the USDA Direct loan program (which seems like a great deal for a buyer), and the way home prices and interest rates are currently (pretty low).

I turned in the first authorization about a month ago and then turned in the first Application on the November 6th (Election Day!). I was "approved for processing", received the letter on November 12th and turned in all the required paperwork (W2's, tax returns, pay stubs, etc) and $32 for a mortgage credit report on the 13th of November.

It's the 21st, the day before Thanksgiving and I haven't heard anything yet… have my fingers crossed and positive thoughts though!

On the house front: I've been looking at houses already for awhile, keeping an eye on the market, options, etc.

Any advice, experiences, or insights into the USDA Direct Loan process, first time home buying, please share!

I'm hoping to qualify for the 38 year mortgage which will hopefully enable me to be able to realistically buy something in the area (because of prices a 30 year loan just won't get me enough to find something with my income). So any experience of insight into the 38 year USDA Direct Loan would be great! Thanks again, this forum has been really useful and I'm grateful to folks for posting!

Re: USDA Direct Loan funding

ruttster — Wed, 21 Nov 2012 23:22:42 GMT

After 3 months I finally got a reply saying I was selected for processing. I have to send in more paperwork (some of the same stuff they got 3 months ago). Hopefully an interview is coming soon! This is a long process.

Re: USDA Direct Loan funding

kans43 — Sun, 09 Dec 2012 15:39:20 GMT

Sorry for not responding sooner. Update on things I finally got the funding, and closed on my home a week before Thanksgiving. As far as any advice on the direct loans. You are doing the right thing olythurst2012 by researching the market. Also don't jump the gun...on putting in on a offer on a home just because you get a pre approval letter. I've seen alot of cases where people have done this...and funding not be there. Don't put in any offer until USDA LO gives the okay. Also once you get your actual funding contentment letter, and go ahead from your LO. The best advice I can give someone with little money. Make offer on a home below the asking price. USDA will loan you the actual appraised value of the home. The difference can be used for repairs required by usda, closing, and upfront homeowners insurance cost. For example if the home is priced at 70K, and the appraised value is 75K. Lets say you offer sellers 65K you have 10K for closing repairs, and the required homeowners insurance for the first year. Wishing you all the best of luck!!!

Re: USDA Direct Loan funding

kans43 — Sun, 09 Dec 2012 16:08:24 GMT

Yes ruttster it is a long process...I sent my first app in March 6 of 2012.

May of 2012 sent in all my paperwork.

July 2012 got my funding commitment

August 2012 made offer on home.

October 2012 got second funding commitment

November 2012 Closed on home.

In my case the USDA ran out of funds. The goverment fiscal year starts in Oct. Ending in Sept. I'm just thankful the sellers were willing to wait.

Re: USDA Direct Loan funding

olythurst2012 — Thu, 27 Dec 2012 19:35:24 GMT

Thanks for the response and filling us/me in! Congrats on the new home too and best for the New Year! I appreciate all the advice you have. I'm still awaiting my loan commitment, and my file is still being reviewed (there were three applicants ahead of me to be reviewed, and it sounds like they have one staff working on this, she has been helpful to me as well). Being patient and just waiting to hear back.

I did have to send some alternative credit references (cell phone, dental bil, cable company) as my credit is good but in the scope of homebuying is "young" I think...

This is the year though and I'm hopeful, some of the homes I was looking at sold which I'm taking as a sign of things meant to be or not. The Direct loan is worth the waiting in the end though.

I'll post an update when I hear more for other folks going through this process. Thanks again for the words of wisdom and best to you!