I need a little advice on what happened when I applied for a loan last week. Went to a local bank and applied for a USDA Guaranteed loan. Middle was pulled at 655 and we were told it was being sent to USDA and should take 1-2 days. Three days later I called and was told it should be anytime. Received an email around day 6 that the "investor" wanted to know a little more about time at job and time at current residence. No problem, sent the info and waited. I was told they should know by the end of the day. After 3 more days I got a vague email to call the processor. I called and she said we were denied because of debt to income by the investor. I do not agree with what they said the DTI was (over 54% back end/ I had 43% per my calculations) but I asked if they could request a DTI waiver because we have several compensating factors. She said that waiver is only for Direct loans which I know is false. We have income that was not included (social security), job security (government), reverse payment shock (we pay $1450 now vs.. $1100 after), potential for future income (graduating school and my disabled daughter is starting to pay rent this fall). I would just go somewhere else but my scores fell after their pull. I feel like we were so close but lost it because of loan processors that didn't know how USDA loans work. 
Can I call the USDA or something? Thanks for any advice in advance.
Just got off the phone with the loan processor. She said that we were qualified for $120000 FHA and that my deferred student loans were included in the ratio. I mentioned what I thought the FHA did with deferred loans if they are 13+ months out. She said FHA rules had changed and that their investor required student loans regardless of deferred date. I offered to include an additional $1800 per month income for the USDA loan and asked if the lender statements showing the anticipated payments was used. She said the payments for the student loans were taken off the credit reports. I have never seen the payments on any credit reports because they are deferred, but what do I know right? I really do not want to use this bank but my score dropped because of their inquiries so I'm stuck. They keep referring to both loans as secondary financing if that makes any difference. I know there are lender overlays w/ credit score and DTI but with FHA rules regarding deferred student loans?
I tried to go with another company and two of my scores dropped from 655 to 624. This experience with this bank has been crazy! They are treating us like subprime borrowers and dismiss anything I say. I think loan processors do not like people that know what they're talking about! 
Can a lender overlay basically change the entire loan for FHA?
@Anonymous wrote:I know there are lender overlays w/ credit score and DTI but with FHA rules regarding deferred student loans?
My LO told me that both USDA and FHA would include student loans regardless of deference/forbearance status. My loans do show a payment on the CRAs even though they are in forbearance (it was the wrong amount, but that's a whole other thread! 
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