My USDA story... Suprisingly USDA was the easy part!

[Jessica503]

I thought I'd take some time to share my LONG home buying process. A little about me, I am 28 years old and have been at my current job for about 7 years. I make about $38,000 a year and at the time I started this process I had zero savings, a small retirement account (about $2000) and a $400 a month car payment. My middle score was a 634. This was back in December of 2012... I put a call in to a mortgage lender I was referred to by a friend who was in a similar position and got a USDA loan successfully. I pretty much just made the call to see what would happen and I didnt think I had a chance in heck to get a loan. Suprisingly I got my preapproval for $150,000 about 2 days later. I knew I didnt want to spend that much so I started looking at homes.

Home #1 -  4 Bedroom 2 bathroom Condo in my PRIME location...- $120,000 + $100/month HOA. Put in offer on 1/14/2013... Since it was a short sale it took a while, recieved offer accepted on 3/7. Deposited earnest money and did home inspection. Home inspection found no major issues. Once we were ready to order the apprasial things got bumpy. HOA president refused to cooperate and wouldn't send required documents. Spent about a month arguing and fighting between the past due HOA fees, past taxes and no one able to get anywhere with the deal I was forced to terminate the contract on 4/4.

Home #2 - 4 bedroom 2 bathroom 100 year old historic home about an hour from my work, small town. - listed at $139,900. I offered $134,900 4/10/2013 and was accepted by the seller on 4/13/2013 . Waiting approximately 30 days and got a counter offer from the bank (this was also a short sale) of $178,000. I had to walk away because my original offer was really the top of my comfort zone.

Home #3 - 3 Bedroom 2 bathroom home built in 1996 in small town about 45 minutes from my work. - Listed at $132,000. I offered $126,900 on 5/21, accepted by seller on 5/22. This was also a short sale and had 2 loans. Waited, waited waited FOREVERRRRR. Finally recieved approval from 1st bank on 8/29 but they only would pay 1% of closing, not the 3% i asked for. Waited some more for the 2nd approval, finally received on 11/15. Had to go request extension from 1st on closing. Had inspection done asap. Inspector found MAJOR water damage under master bathroom, rotted subfloor and support beams. Got multiple bids from contractors, and negotiated with seller, the eventually agreed to pay half of contractors bid. Typically short sales are as is, but in this case the seller knew about the damage and did not include it in their disclosures, so that gave us some leverage. Had appraisal done, recieved appraisal back on 1/4, came in at $130,000.00. Revised loan docs for full $130,000 to cover closing costs and went to underwriting. Underwriters cleared with a few conditions - Water heater must be strapped down, exposed wiring must be capped, siding must be repaired, roof needs 3-5 year certification. At this point we are STILL waiting for the extension from the 1st bank. Waiting to pay for certification and repairs until extension is recieved. In the mean time we sent the file to USDA for their approval. I RECIEVED MY USDA APPROVAL IN 2 1/2 BUSINESS DAYS!!! Turns out they have been the easiest part of this whole process! At this point it looks like my payments will be about $895.00/month including taxes/insurance and i am at 4.625%. My middle score is now a 649.

Now I hurry up and wait some more... According to everyone i should be able to close by the end of this month, i find this hard to believe since there is still work to be done and a re-inspection by the appraiser to make sure i did the repairs as requested. Pretty much I have a loan that is ready to close and a leinholder that is continuing to hold up the process. Crossing my fingers we get the extension today, can have roof repairs done tomorrow or Wednesday, roof certification thursday, fix the siding friday and have the re-inspection done early next week so we can close ASAP. Still terrified this will all fall apart but for right now trying to stay positive!

Hope this helps anyone out there. It can be a LONG and VERY stressful process, but keep on plowing through and hope it works out!

[beanie7132]

Congrats!!!!

You had zero in savings? Not trying to be nosey, just trying to line up my situation with yours to better understand where I stand in the home-buying process. 

THanks!

[drift3r]

Congratulations!!! So excited to hear that you found your dream home after a long wait. After a process like that I'm sure you've developed incredible patience.

I had a very similar situation. I lost out on 3 houses over the last 2 years due to bad inspections and sellers getting cold feet. After a 2 year home search I'm finally closing on my dream house this week Wednesday. I also did USDA and it went faster than expected. I read so many reviews that the USDA process would be a major pain but I was very surprised by how easy it is. I was told Michigan USDA was about a month behind but I got my loan back with no conditions in exactly 3 weeks.

Wishing you the best of luck with the rest of your process. I hope you make it to the closing table soon!  

[Jessica503]

Yes, at the time I applied i had zero in savings and was pretty much living paycheck to paycheck...down to the last few dollars. For the last year I have spend saving up, using coupons for everything,  and trying to be responsible with what im able to save... I had lots of what I thought were negatives against me, including NO active tradelines except for my auto loan. I have no credit cards and no other lines of credit. Also in the process of the first condo falling through i moved to what was supposed to be a temporary place (we thought we would close within 45 days). It has now been almost a year and I am not on a lease or have any proof of rent I've been paying for the last year (i pay my friend in cash). Neither of these were a problem at all to the underwriters. I have very few conditions (mostly just a few letters of explanation). Luckliy the year has given me time to bump up my credit score a little bit, so no conditions from USDA.  

This LONG process has made me very patient, flexible, and at times VERY VERY frustrated and upset... I was in tears after the inspection and thought there was nothing i could do and that this house would fall through too... . Im sure there have been days where my realtor despised me and wished i would disappear lol. I am seeing the light at the end of the tunnel now and praying things will work out. Everything i own except my bed and some clothes have been in storage for almost a year now and im definately ready to see them again!!! haha  

[SSTO]

Congratulations!  What was your mid-score when you were approved?  The two lenders I went to want a 660 mid-score before they send to the Underwriter, and I'm only at 638 now.  I also have few tradelines - just my car and rent right now as my other tradelines are 5 months old.  I make about $39,000 per year and have been at my job for 13 years but have no saving's.  This is not an easy process...so congratulations for getting through it so easily!!!  Who is your Lender??

[Jessica503]

My mid-score when i got my pre-approval was 634, my score at the time the loan was approved thorugh underwriting was 659... I was really trying to get to 660 but they didnt even ask lol. I'd say you should have no problem. I used Pacific Residential Mortgage, I am in Oregon... Not sure if they service other areas. Other than some technical issues (their entire office email and fax were down for a few days) they have been awesome! If you want my LOs name i can PM you so can reach out to her. They have been very easy going with everything and constantly reassured me everything would be okay. I was terrified UW would find some reason to deny me. lol Turns out UW was the easiest part!

[arizonahd]

You're doing good! I am also 28 with similar income and was successful closing on a USDA (Arizona) loan on 12/31/2013. Like yourself, I was impressed by the speed of the USDA (although the holidays caused me about a two week delay). One catch 22 for me was some last minute conditions from the lender the day before closing (they wanted updated paystubs from my fiance but this was during school break when no one around!) I also had to find someone not related to me in my family business to verify employment. Very stressful but you're lucky the process has been so smooth, it took us forever and lots of bumps, I was pretty much losing all hope the deal would go through. 

When your signing loan docs, make sure they don't fee you for things you paid out of pocket for and ask lots of questions. I was told by the signing agent that I was one of the few to actually ask lots of questions, she had to get back to me on a few which just goes to show you how much BS they hide in the details. They tried to fee me for the appraisal (which I paid for!). Now I have to wait till October  to recover the funds because it will be sent to me as an escrow overage. I would have lost the $500 if I didn't read the itemized fee schedule which for me was quite long! I believe it was next to the $2000 paper fee or maybe the $5000 because we can fee 

Btw, sorry for the unsolicited advice! I guess if I did this process all over again, I would make quite a few changes with the info I have gained both from this forum and my personal experience.

[Jessica503]

Thank you for the advice! Im supposed to go sign docs on Monday so it can fund/have keys by Thursday/Friday... I had a few conditions based on repairs the appraiser called out and the very last one is in the process of being done today (some siding repair work). The re-inspection is scheduled for Tuesday so hopefully it all goes well. Luckily I don't have to worry too much about the $$ at closing because I will actually be getting back about $1100.00 at closing but i will be sure to double check all the line items.

I can't wait to have those keys in my little hand and start painting!!! lol   I am a ball of excited worried panic happiness haha, this has been such a long journey for me and i can't believe how close it finally is!

[arizonahd]

Congrats, sounds like you will be homeowner soon! Your feelings are identical to mine before closing. Athough after, it felt so liberating to not be under the microscope! I totally wanted to max out my credit lines, increase my DTI to 75% and make late CC pmts...just inspite of it all  Of course, I didn't lol.

Cheers and good luck!  

[Jessica503]

Signed closing documents today.. Still waiting on re-inspection report from the appriaser to confirm all repairs were completed as requested. Should fund and have keys thursday or friday.. .the anticipation is killing me!