Hello Everyone, 
I thought I would share my experience this morning with
a meeting I had with a mortgage broker at BB&T concerning
USDA Guaranteed Loans. BB&T is a large regional bank
doing business in the southeastern US.
As luck would have it, I spoke with the Assistant Vice-President
of the branch who happened to be one of the senior loan officers.
So I knew I was talking to the right person.
Here's a brief summary of what she told me:
--- USDA Guaranteed Loans are 100% financing.
--- Rates right now are 5.375% fixed for 30 years with 0 points
--- No private mortgage insurance (PMI) is required
--- The 2% funding fee can be rolled into the loan or paid separately
--- Middle score of 620 gets you into the best rates, but right
now the underwriters prefer to see a 660. Even though the loan
is guaranteed by the government, BB&T is very conservative.
--- Estimated time from mortgage application to closing is
45 to 60 days. Everyone and their brother is doing cash-out
refinances right now, so the bank's approved appraisers are
really backed up. Appraisers normally allow 5 to 7 days to
turn around an appraisal. With the backlog, it's now 8 - 10 days.
--- BB&T qualifies applicants based on the current income chart
(8 income levels), not the modified chart (2 income levels). They
are waiting until the new changes actually go into effect in March
before qualifying folks with the modified chart.
--- I made a point to mention that some of the major banks are
already qualifying applicants based on the modified income chart,
going to closing and then hanging on to the loans until March when
the USDA's next batch of funding becomes available. Once the loans
are guaranteed by the USDA, they become sellable. They are
then packaged and sold so banks can replenish their cash and
originate new loans. The BB&T loan officer was aware of this fact,
but she explained that their bank is much leaner than the majors
and they don't have the luxury of additional personnel to look after
a portfolio of loans. Although BB&T does hold on to some loans,
for the most part they sell what they originate as quickly as possible.
--- BB&T services all mortgages that they originate. So even after they
are sold, you would still continue to make your payments with BB&T.
--- If for some reason you run into financial hardship and need to
restructure payments, extend the loan, etc., it's best to do it as quickly
as possible. The longer you wait, the more difficult this becomes.
--- Of all the government loans that BB&T currently offers (FHA, VA
and USDA Guaranteed Loans), the loan officer stated that USDA is
hands down the best mortgage product they offer.
OK, I think that's about it. The lady I spoke to was SUPER nice and
very knowledgeable. If you live close to a BB&T branch it's worth your
time to stop by.
Hope this helps. Enjoy the day, Everyone!!!
CanDo
"The right attitude is everything"
thank you for this information. So the mid score used should be 660 or higher? I will be there I think once I pay off more of my credit cards.
Thanks again.
Hi granny,
She said that it's smooth sailing thru the underwriters
if you have a 660 or higher. If you have a 620, they
might ask you some questions and get you to document
some things in writing. That's the only difference.
And I forgot to mention that virtually all of their underwriting
is automated. About 2 years ago they switched to GUS
(guaranteed underwriting system) to ensure that all applicants
are treated as fairly as possible.
EDIT TO ADD: A slight correction. It's the USDA that switched
to GUS about 2 years ago, but BB&T does still underwrite the
majority of its loans thru an automated system.
Of course, with certain exceptions they underwrite manually
on a case by case basis.
So it looks like some lenders are beginning to tighten a bit
even with guaranteed loans. And I'm glad that you find the
information helpful. Make it a great day!!!
CanDo
"The right attitude is everything"
Hi rom,
The USDA is the US Department of Agriculture.
They have a special department that offers what
they call rural development housing loans. And
depending on where you live, "rural development"
can be 500 miles from nowhere or in a small town
with a populaton of 25,000 or less.
The USDA loans that BB&T makes is called a
"guaranteed loan" because the bank makes the
loan and qualifies you but the USDA insures it
in the event of default. Mortgage loans are 100%
financing and no PMI is required. You do pay a
2% fee but it can be rolled into the cost of the loan.
USDA Guaranteed Loans are restricted by income
because they are designed for "moderate income"
applicants. You can click the link below to take a
look at the income levels for your local area.
Just click the state and a pdf chart will appear.
http://www.rurdev.usda.gov/rhs/sfh/sfh%20guaranteed%20loan%20income%20limits.htm
BB&T will qualify you based on this current chart. However, starting
on/about March 20th the income chart will be modified. 1 2 3 and 4
person families will qualify at the 4-person income level. 5 6 7 and 8
person families will quailfy at the 8-person income level.
If you'd like more information there are quite a few threads in the mortgage
forum about USDA Guaranteed Loans. But it's always best to speak directly
with a lender who makes the loans.
I hope this helps you, rom. Lots of people here in the room know about
these loans, so don't be shy about asking questions. Thanks for the post!
CanDo
"The right attitude is everything"
One last thing, rom:
When you click on the link above and look at the charts,
focus on the "Mod Inc Guar Loan" line. Those are the
income limits that banks use to qualify applicants.
The "Low Income" line is a special state bond program.
I would contact your local USDA office for details, as I
am not familiar with how that works.
Hope this helps.
CanDo
"The right attitude is everything"
No problem, rom. I'm happy to help.
If you don't see your county and you live in the Atlanta
suburban area, just go by the Atlanta metro numbers.
And yes, it might be more beneficial to wait until after
March. The 4-person qualifying moderate income limit
is $81,850 for the Atlanta area. This should be more
than enough to qualify you and your family.
Once again, I'm glad I could help. Enjoy the day!
CanDo
"The right attitude is everything"
Thank you so much, Kathy! I'm sure losts of posters will be interested in this great info.....maybe you could post it as a separate thread so others can find it readily.
Sadly,
I'm not in an eligible area so I guess I'll just continue with my FHA re-fi.... which I hope will be wrapped up soon!
Thanks again!!