Question about USDA Direct and BK seasoning

[Anonymous]

Congratulations angeldaria on the approval!

And also wednesdayaddamsd for working towards the same!

I myself and working towards a USDA Direct loan. I am currently working over the next 2 months to improve my credit and get it up to 640. I am currently at a 617.

[wednesdayaddamsd]

Are you recently out of BK as well?

[Anonymous]

No bankruptcy in my past. 2 Judgments (1 paid 1 not) and a high cc balance due to a marital separation.

[wednesdayaddamsd]

Thanks Angel,

Can I ask what your scores were when you were discharged? Also, how much did your Transunion Fico score differ between myfico and your lender's score? I am wondering how far off mine is since myfico uses TU 98 and USDA uses TU 04.

Thanks again for all your help!

)

[Anonymous]

I finally got my certificate of approval.  Can't find any land I like right now but I'm working on it Anyway to answer your question not sure what the backruptcy did to my credit.  I had horrible credit before the bankruptcy and it was not until I found this website about 1 year after the discharge that I began to clean up my credit and start to monitor my credit scores.   When the USDA pulled my credit in Jan. of this year my TU on my FICO was 709 and they pulled a TU 04 of 714.  My EQ was a my fico of 641 and they pulled EQ of 641.  From reading on the boards everybody TU04 is different some are lower than their myfico score and some are higher.  In my case my TU04 score was higher.

[wednesdayaddamsd]

Congrats on your letter! And thanks again for your detailed response. Every bit of info helps tremendously! )

[wednesdayaddamsd]

Angel,

Do you know what your interest rate is yet? I am confused about the low income payment subsidy. Does anyone here know how that works? Or how it is calculated?

[Anonymous]

Interest rates are not locked until you close on the loan.  Right now our preliminary interest rate is 4.6%. They tell you the interest rate and terms on the loan on your certificate of eligibilty but again the rate does not lock until you close on the loan.  The interest rate could change on the 1st of every month. For example in March when I was initially denied the interest rate would have been 4.5%.  As far as subsidy goes chapter 6 of the handbook explains subsidy and how it is calculated.  It is very confusing to me so I can't really explain to you how they come up with subsidy assistance calculations. We didn't qualify for subsidy assistance.  But the loan has so many other benefits that conventional financing does not that I am not complaining about not getting a subsidy.

[wednesdayaddamsd]

Thanks Angel! You are like a regular USDA information booklet! )

[Anonymous]

I sent you a PM message   Good luck on your road to homeownership!