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New Member
Posts: 5
Registered: ‎07-09-2013
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USDA 502 Guaranteed Loans???

Can anyone tell me about the (502 guaranteed loan) process? I can't get the (502 Direct Loan) but I do qualify for the guaranteed. I have Fico scores of 655, 666 & 677. I filed bankruptcy back in 2010 due to a divorce and loss of a job, I have no collections or late payments. I now make 20+ an hr @ 48 hrs per week. 

 

The loan says it allows you to buy, remodel or build a home. Is that correct? Who in the world do you talk to about these loans? I don't want to go down to a local bank and go through a credit check before I'm ready. That affects my credit scores! :smileyfrustrated:

Frequent Contributor
Posts: 338
Registered: ‎05-13-2013
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Re: USDA 502 Guaranteed Loans???

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. 

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

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New Member
Posts: 5
Registered: ‎07-09-2013
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Re: USDA 502 Guaranteed Loans???

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?

Frequent Contributor
Posts: 338
Registered: ‎05-13-2013
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Re: USDA 502 Guaranteed Loans???

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.

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New Member
Posts: 5
Registered: ‎07-09-2013
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Re: USDA 502 Guaranteed Loans???

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!!

Established Contributor
Posts: 853
Registered: ‎12-09-2012
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Re: USDA 502 Guaranteed Loans???

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.

Thanks!

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New Member
Posts: 5
Registered: ‎07-09-2013
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Re: USDA 502 Guaranteed Loans???

OK,

 

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.

 

http://www.usdaloan.us/faq.html

 

 

Regular Contributor
Posts: 170
Registered: ‎03-25-2013
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Re: USDA 502 Guaranteed Loans???

I think some of that info is outdated on the website. Such as the upfront guarantee fee. I think that was changed to 2%. And as far as a new construction home I believe the rep could be giving you wrong information or you misunderstood them. I've been looking at nothing but new builds for the area I'll be moving to and any subdivision I've gone to that uses a specific builder has flyers and signs for 100% usda financing whether you choose a lot or pre existing home there.

It may differ from state to state or either the rep meant you can't purchase a piece of land or a acreage and choose your builder. But I could be completely wrong just letting you know what my experience has been so far. I live in SC

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Frequent Contributor
Posts: 338
Registered: ‎05-13-2013
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Re: USDA 502 Guaranteed Loans???

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.pdf 

 

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.

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Frequent Contributor
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Registered: ‎02-14-2013
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Re: USDA 502 Guaranteed Loans???

We are going to do usda with new consturction we are in Ms

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