07-09-2013 11:11 AM
Can anyone tell me about the (502 guaranteed loan)
The loan says it allows you to buy, remodel or bui
07-09-2013 11:55 AM
Call around to your local lenders and ask if they handle USDA loans. Shouldn't be hard to find one.
Check out the USDA site for qualification info. They're VERY strict on the income limits.
07-09-2013 12:37 PM
I have already qualified for the USDA 502 Guaranteed loan. The USDA website is who qualified me. My question is, does the USDA 502 Guaranteed loan allow you to build your own home or do you have to buy a home alreday built?
07-09-2013 12:59 PM
You can do either as long as it's located in an elegible location. That website also includes the maps showing which areas are eligible and which aren't.
FYI, the eligible areas are scheduled to change in October. The house we're in the process of buying is eligible now, but in october it won't. I believe the new maps are also on the USDA site.
07-09-2013 02:04 PM
That is great information!! I live in Oregon and trying to get any info here is like pulling teeth!
This is what I found so far:
USDA 502 New Construction
(New Construction is defined as a dwelling to be built or a dwelling which is less than 1 year old and has never been occupied)
Lender will obtain the following:
Certified Building Plans and Specifications. Although plans and specs must be obtained by the Lender, the Lender need not submit a copy to the RD Field Office for review. Lender may use Form RD 1924‐25, Plan Certification, to certify that the dwelling has been built in accordance with applicable development standards.
Evidence that the three required inspections have been completed. They include:
1. When the foundation is in but prior to backfilling.
2. When the shell is closed but plumbing, electrical and mechanical systems are still exposed.
3. When construction is 100% complete.
4. The first two inspections are not required when the builder supplies an insured 10 year warranty.
Inspections must be completed by someone deemed qualified by the Lender.
A Builder’s Warranty is issued which provides for at least a 1 year warranty from the date of completion.
I sure hope that helps others!!
07-09-2013 04:56 PM
ok , not to hijack the thread but looking for more input. I checked the link posted above, the home I want is in the approved area and I am qualified for 502 gauranteed loan as well.
What docs do they require and what scores?
I couldnt find anything on the site unless I am overlooking it.
07-09-2013 05:32 PM
Just talked with a USDA Rep. It seems they do NOT allow new construction loans unless the home is already built. They do not help out with the process to build just the process of the new home that is already built on a lots in a new housing development.
Here is a link to answer a few questions about credit scores and other things need to qualify.
07-10-2013 07:06 AM
07-10-2013 07:20 AM
Here is a document I ran across that spells out in good detail all about the income requirements of USDA http://www.rurdev.usda.gov/SupportDocuments/an4714
Now keep in mind you're dealing with two different things. USDA itself isn't originating the loan. USDA is just guarenteeing the loan. You still need a mortgage thru a regular lender. The lender can have stricter requirements than USDA. As an example, USDA sets a minimum FICO score of 620, but I wasn't able to find a lender that would accept anything lower than 640.
My LO explained the income requirements as the lender is going to try to minimize your income for repayment purposes and USDA is going to maximize it for elgibility purposes.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.