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Emotionally exhausted with the USDA process

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Anonymous
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Emotionally exhausted with the USDA process

There are so many days that I want to give up on this!

 

First...I am married with two kids. My husband and I are partners in a business that we own and he is also a college professor. Been at his current job for 3 years. He is a permanent resident (can do everything but vote) and from England. His mid score is 630. We slowly brought it up to that. His total debt is around $3,000. Nothing late, no collections, or anything. The reason his score is on the low side is due to length of credit history. He's only been in the country for 5 years. 

 

Anyhoo...

 

We qualify for the USDA loan. We are working with a mortgage company. The loan has to be in his name because someone stole my identity 5 years ago and I am still fighting things through the court system. Probably will be for years. Even then, though, my score is a 608 so it's not terrible, but there is a judgement on it and it won't be taken off until the court reaches a decision. We've been going around in circles on that one for 2 years. 

 

So, we went to the first mortgage company when his score was a 620. They told us that we needed to bring it up to a 630. So, he paid off a $600 credit card. We waited 3 weeks for them to do the rapid rescore. We had to pay them $170 to do the rescore. Ironically, it took them so long to do it that by the time they did, it was already on the CR anyway. It was brought up to a 630, but then the LO said it needed to be a 660. To do that, we'd have to pay $1100 on his debts and pay the rescore fee again. We didn't want to do that because they had already told us to do that once, and we did, and that wasn't good enough. Who was to say that once we got to 660 they wouldn't want us to get to 700? (By the way, they hadn't sent our stuff to the UW. Said they couldn't send it in until it got to a 660.) 

 

Looking back, although we had pre-qualified for the USDA loan at the amount of the house we had put a bid on ($133,000) we should have waited for the pre-approval and gotten everything in writing. 

 

So, we talked to another mortgage company. This one had no problems with his credit score being a 630, but did have problems with our income. They apparently could not use the business income, even though we have 4 years worth of tax returns to show profit, because it is in both of our names on the returns. In order to use the income, they said, they would also have to put me on the loan. Since we can't do that, we were kind of screwed. 

 

We could take my name off the business, but then we'd have to wait 2 more years since you have to show 2 years of tax returns for self-employment. We've already spent almost 5 years trying to establish credit on him and being diligent about paying things on time and stuff. We are currently renting and pay $1100 per month. Our house is not good. We live in a very rural area and rentals are few and far between. Our house is large, but our landlord is a step above a slum lord. There are rodents in the walls, fleas everywhere, and virtually no insulation. The house we had bid on would have lowered our monthly payment by about $300 per month and it was beautiful. It's definitely cheaper to buy here than it is to rent. 

 

With just my husband's teaching income, we only qualify for $85,000. So, we lost the house that we had put a contract on. It hurt and we were upset, but oh well. Other fish in the sea and all that...So now, we are looking at what is out there in the $85,000 range. Not much. Mostly just trailers and USDA won't finance those around here. (Which is perfectly fine because we're not looking at modular homes or trailers.) My husband does have a personal finance loan with a $1500 balance. The LO said that if hepaid that off it would lower his debt to income ration and then we could qualify for $100,000. That's a little better, although a search proved that it didn't give us that many more options. 

 

So, after looking around, we foun the perfect house for us at $85,000. I called our real estate agent and it's her listing. It's a little quirky, however, we were concerned that it wouldn't be eligible for the USDA loan. The heating sources are a gas fireplace, wood burning fireplace, and baseboard heaters. The ducts are there for central heat and air, but it hasn't been installed yet. We asked her to check and see if it was eligible for the USDA loan before we looked at it and got attached. She called the LO and checked it out and called back and said we were "good to go." We looked at it, fell in love with it, and decided to place a bid on it. Only, she DIDN'T ask the LO if it would be eligible for the USDA loan. She only asked about the price to see if it fell within our approval amount. So now, we have found yet another house that we love and we might not be able to get it, either. 

 

I am wondering...should we place a bid on it, hope it appraises for more than it is priced, and have the central heat and air installed? I got a quote on that and it's going to cost about $3500. If he pays off his loan and it raises our amount to $100,000 then we could theoretically bid at $85,000 (or lower) and then borrow the whole amount, having that wiggle room to install the heat and air and posibly do anything else that the USDA people deem important. 

 

I really, really, don't want to put the whole business in only his name and wait another two years before trying to buy again, although if I did that we would qualify for $140,000 and that would open us up to more opportunities. (Still, we loved the one at $85,000 more than we did the one that we were originally trying to buy.) We need to leave this house. My 5 year old is constantly covered in welts from the fleas and my 1 year old doesn't even have a bedroom. Her bedroom stuff is in the upstairs foyer. It stinks that our tax returns show an income of $55,000 (waaayyy aboe average for where I live) and my husband has good credit history (if not a great score) and yet we basically live in a slum. 

 

I swear, at this point I am wondering if a land contract might not be a good idea. 

Message 1 of 5
4 REPLIES 4
notfancy
Valued Contributor

Re: Emotionally exhausted with the USDA process

I'm so sorry to hear of your struggles and  frustrations. It is no wonder that you're emotionally strung out from this. I can't imagine the stresses and dissapointments you've been feeling. Keep your chin up!!!! Can you qualify for a FHA loan instead of USDA given a bit more time?

625 EQ FICO Current Score: 660 DCU EQ FICO/ 645 Scorewatch EQ FICO , EX FICO 664, TU FICO 737 (08/2014)
Goal Score: 700   Seedling again as of 07/29/14
Message 2 of 5
Peter1142
Established Contributor

Re: Emotionally exhausted with the USDA process

They probably want a 660 for the DTI waiver.... Your DTI is probably too high and requires a waiver. If your DTI is above 660 it is much easier to obtain.

 

I'm sorry to hear about your frustration, it always sucks when they tell you one thing and then it changes to another. I'm sure you will get there.

 

Your other option is an FHA loan, which will be easier to obtain, but will be more expensive with a 3.5% down requirement and hefty monthly mortgage insurance.

Message 3 of 5
womaneky
New Visitor

Re: Emotionally exhausted with the USDA process

I had to sign in with a different name because I don't remember my old login information...

 

I actually wrote that post more than a year and a half ago, in 2012. We ended up closing on our house in December and have been living in it for a little over a year now. So everything worked out.

Message 4 of 5
notfancy
Valued Contributor

Re: Emotionally exhausted with the USDA process


@womaneky wrote:

I had to sign in with a different name because I don't remember my old login information...

 

I actually wrote that post more than a year and a half ago, in 2012. We ended up closing on our house in December and have been living in it for a little over a year now. So everything worked out.


Guess I should have looked! Someone had posted before I did which brought the topic current. However, it's good to see that you came back and updated that everything turned out well! Congratulations!

625 EQ FICO Current Score: 660 DCU EQ FICO/ 645 Scorewatch EQ FICO , EX FICO 664, TU FICO 737 (08/2014)
Goal Score: 700   Seedling again as of 07/29/14
Message 5 of 5
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