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jmorris11
Posts: 2
Registered: ‎06-21-2011
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Help with a USDA Rural Development Loan

[ Edited ]

Alright, so here is my question.  Where do I go to get qualified.  I currently have a 620 Median Score with 9% DTI ratio.  I make 50k yearly and am a single mother.  Anyone know where to go to get qualified?  I am looking to be purchasing my first home in approx. 60 days, but need to assure I qualify and get pre-approved before I put in an offer to the seller.  I want to make sure I'm ready for the process to begin before it starts.  Any advice would be greatly appreciated.

 

Thank you

Warm regards,

Julie.


 

Senior Contributor
Booner72
Posts: 3,889
Registered: ‎05-24-2011
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Re: Help with a USDA Rural Development Loan

Realtors can often refer you to loan officers - as can your friends that are homeowners.  Word of mouth is the best in my opinion. 

Good Luck!

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
New Contributor
doeblinv
Posts: 54
Registered: ‎05-24-2011
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Re: Help with a USDA Rural Development Loan

where are you buying? You know it is funny, because I am in same situation, mid score barely high enough, single mom, with 53 k... the lender I am using said a 620 would be fine, but the same company, just different office location, said it had to be a 640!! Same company! SO i don't know if it depends on what the LO wants to do and how hard he is willing to work on your file, but I got two different answers by 2 different LO from the same company in the same city!!! Where are you located? I would just start calling some of them and ask them their min score requirment like I did.

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jmorris11
Posts: 2
Registered: ‎06-21-2011
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Re: Help with a USDA Rural Development Loan

I reside in Pennsylvania.  Trying to purchase a home in the rural parts of Allegheny County.  I qualify for the home as I have checked it out on the eligibility site.  I just don't know where to go to get qualified without them running my credit at every location.  I have already had it pulled by two different mortgage companies two months apart and my CS dropped by 50 pts.  I don't know how else to have them give me a direct answer without them having to pull my credit.  I am a member of Experian so I know what my credit score is and why/when it drops.  Does QuickenLoans.com do USDA loans?  

 

Can you see why I'm stuck in a rock and a hard spot?

 

btw, thank you for moving my question to an updated forum. I googled USDA rural loans and got the old forum.  I appreciate the assistance.

 

Thank you

warm wishes,

Julie

Super Contributor
ShanetheMortgageMan
Posts: 8,174
Registered: ‎09-28-2007
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Re: Help with a USDA Rural Development Loan

[ Edited ]

First you'll want to ask any lender what their minimum score requirements are.  For USDA a lot of lenders require a 640 score, some just require a 620 score.  The reason for the 640 score is that credit requirements are a little more forgiving.  Second, I'm not sure what is on your report that is bringing your scores down, but for USDA, in general, you'll want to make sure your credit is free of delinquencies for the past 12 months.  If you have them, owing collections don't always need to be paid, particularly if your score is 640+ (see the importance some lenders place on the score?).


50 point drop from 2 credit inquiries seem a bit drastic, but I'm not a credit score expert so I'll defer to those who are.  But to improve your chances I'd work on getting your scores back up to a 640 and that'll improve your chances.

 

Third, another big part to qualifying is your debt to income ratio, $50k and a 9% DTI, so you have $375/mo in payments?  If so, not sure how much of a house price you are trying to qualify for, I've never actually done a loan in Pittsburgh so I am not sure what to use for property taxes are, but I'd imagine $150k is something your debt ratio could qualify for.

Regular Contributor
veggs2000
Posts: 172
Registered: ‎07-06-2011
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Re: Allied Home Mortgage Corporation

[ Edited ]

We are getting a USDA loan and I was told I had to get it to at least 640 and just barely managed to.


Starting Score: EQ: 540 TU: 606 EX: 605 (all from lender on 7/26/11)
Current Score: EQ: 601 TU: 648 EX: 642 (from lender on 8/4/11)
Closed on our home on 8/31/11!!!!
Goal Score: 620-650 to start

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Fleurdelis28
Posts: 68
Registered: ‎07-08-2011
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Re: Help with a USDA Rural Development Loan

I'm just starting my process. First off, try this website...it will give you the email address of the regional housing specialist who can send you an application.  And he/she should give you directions from there. Good luck

 

http://www.rurdev.usda.gov/LA_Home.html

 

click on the area where you are located or looking to purchase.


Starting Score: 538
Current Score: 555
Goal Score: 675


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Fleurdelis28
Posts: 68
Registered: ‎07-08-2011
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Re: Help with a USDA Rural Development Loan

Sorry, wrong website...here you go:

 

http://offices.sc.egov.usda.gov/locator/app?state=us&agency=rd


Starting Score: 538
Current Score: 555
Goal Score: 675


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Moderator Emeritus
llecs
Posts: 32,881
Registered: ‎08-04-2007
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Re: Allied Home Mortgage Corporation

[ Edited ]

Split post to form a new thread within Rebuilding Your Credit

New Contributor
Trons
Posts: 69
Registered: ‎08-28-2012
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Re: Allied Home Mortgage Corporation

[ Edited ]

I might be able to shed some light on the different answers you're getting regarding credit score requirements.  The investor (with a USDA Loan, I believe it's GNMA) has a lower credit score requirement then you're lender.  The reason for this is because the lender probably doesn't service the loan after it's originated, or if it does may only service it for a short period, then sell it.

 

When a loan is sold, it's done so on the secondary market, and that's where the higher credit requirements come in.  Your loan will be grouped/bundled with other loans that are similar, such as credit score at application, loan amount, term, ect, then sold to a servicer who will service it.  Your loan can actually be sold multiple times and will probably end up with one of the big 5 (although, BofA is probably not likely, I've heard they are not purchaseing loans where GNMA is the servicer, but that may be a rumor).

 

The secondary market is the requiring the higher credit score and because of that, the lender.  GNMA loans are difficult to sell with anything lower then a 620 and it's easier to bundle them if the score is above a 640.  You may have better luck going to a mortgage company that will not sell it after it's originated because they only have to worry about the investor requirements, not the secondary market requirements.  Banks I would suggest, although I can't promise they don't sell on the secondary market, are BofA (currently the largest servicer of mortgages), GMAC, USBank, and Wells Fargo.

 

Side note, USAA does not sell their mortgages on the secondary market either, but they do not service them either.  They contract with larger servicers in a program called "Sub-servicing."  Not sure what kind of requirements they would have.

Starting: EQ 590 (LP 8/12) TU 589 (LP 8/12) EX 612 (LP 8/12)
Current: EQ 650(LP 9/12/12) TU 667 (LP 9/12/12) EX 676 (LP 9/12/12)
Goal: 620 (for VA Mortgage)
Goal Reached. Pre-qualified for VA loan, 9/12/12

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