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Established Member
theoutsider
Posts: 12
Registered: ‎08-13-2008
0

USDA 502 loan income limit modification

How can I find out if the final rule will definitely go into affect on January 20th?  I just signed a Sales Contract contigent upon getting USDA application in on the th 20th or 21st of January?  Is this income modification pretty much a done deal?  My lender already says I will be approved once the income levels go up on the 20th!  Somebody help ease my mind or do I have to stress for 2 more weeks!
Established Contributor
CanDoAttitude
Posts: 878
Registered: ‎04-08-2008
0

Re: USDA 502 loan income limit modification

[ Edited ]

Hey theoutsider, :smileyhappy:

 

Pretty exciting stuff, isn't it??!! :smileyhappy:

 

As I understand it, the USDA first issued an advanced notice announcing

the income changes back on April 10th, 2008. The notice stated that the

changes would go into effect on January 20th, 2009, but any adverse comments

( i.e. formal objections to the amended income limits ) must be filed by

Monday, January 5th, 2009. As you know, that's only 2 days from now.

 

So stay in close contact with your Lender between now and Monday.

If no formal objections are filed, the new income limits go into effect on

January 20th (Inauguration Day) as planned.

 

And just so everyone else who might be interested in a USDA home loan

knows what we're talking about, here's the deal:

 

Qualifying income limits for USDA home loans are going up due to the

dramatic increases in home values over the last several years.

 

For households with 1 to 4 people, the new qualifying income is a

maximum of $70,750 (which is the 4 person limit).

 

For households with 5 to 8 people, the new qualifying income is a

maximum of $93,400 (which is the 8 person limit).

 

USDA loans have very attractive rates, ranging from 5.3 to 5.99%

for a 30year fixed rate mortgage. USDA loans are 100% financing.

The only other government-backed mortgage product offering 100%

financing is a VA loan.

 

So to make a long story short, you'll have to sweat it out for another

48 hours, theoutsider. But this is GREAT news for anyone interested

in these loans.

 

Hope this helps. Enjoy the weekend! :smileyvery-happy:

 

p.s. For anyone currently in the process of buying a home with a

USDA loan, it might be best to push back your closing until after

January 20th, 2009 in order to take advantage of the higher income limits...

 

CanDo

 

"The right attitude is everything" 

Message Edited by CanDoAttitude on 01-03-2009 08:50 PM
Message Edited by CanDoAttitude on 01-03-2009 08:53 PM
Super Contributor
DallasLoanGuy
Posts: 6,178
Registered: ‎07-03-2007
0

Re: USDA 502 loan income limit modification

My USDA rep said it was just a formality.... will go thru

 

 




* While I try to visit the forum often, please feel free to contact me directly with a link to your post if I fail to answer a follow up question.

* Lending across the entire 'Great State of Texas' since 2004
Valued Contributor
BrianB_The_Loan_Professor
Posts: 1,381
Registered: ‎07-29-2008
0

Re: USDA 502 loan income limit modification

What Tom said :smileyhappy:
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Brian B The Loan Professor
Mortgage Banker Lending in all 50 states -
Established Member
theoutsider
Posts: 12
Registered: ‎08-13-2008
0

Re: USDA 502 loan income limit modification

[ Edited ]

Thanks DallasLoanGuy, but I called "Mr. X" with Rural Housing in Washington DC today and he said that the income limits increase had been bumped to March 20th 2009.... Do you think he misunderstood me?  Income limits increase and 2-tier income structure are 2 different things.  I'm more interested in the later since I am about $3000 from qualifying!  He mentioned something about not enough funds.  I;ve tried to get back in touch with him, but he must be busy.  Do you have any contacts.... I'm going crazy!  My new home purchase pretty much depends on getting this loan.  Once again, I'm interested in the implementation of the 2-tier income structure (1-4 person family and 5-8 person family)  We fall under the 5 person family and the change in policy would make us ready to go on January 20th 2009, if the change will actually take place.  Any help would be appreciated!  Stressing in NC!

 

Edited to remove name.  Please refrain from posting personally identifiable information, whether it's yours or anyone else's, in the fora.

Message Edited by WhirledPeasPlease on 01-06-2009 10:22 PM
Established Contributor
CanDoAttitude
Posts: 878
Registered: ‎04-08-2008
0

Re: USDA 502 loan income limit modification

Hi Everyone, 

 

I just got an email from my mortgage broker about 30 minutes ago.

 

She confirmed that funding for USDA loans has been temporarily suspended

until March 20th, 2009.This also means that the income limit modifications

will not go into effect until that time as well.

 

She also expressed hope that the funding problem will be resolved

before then, as USDA loans are growing in popularity due to the low

fixed rates and 100% financing.

 

However, she didn't say anything about the USDA being "out of money".

It's just the funding for the Section 502 Rural Housing loans that are

temporarily effected.

 

So for all of you in the market for a home using a USDA loan, please stay

tuned. Maybe we'll get lucky and funding will occur before March...:smileyhappy:

 

CanDo

 

"The right attitude is everything"

Valued Contributor
BrianB_The_Loan_Professor
Posts: 1,381
Registered: ‎07-29-2008
0

Re: USDA 502 loan income limit modification

It depends on the bank - some banks will continue even though USDA has announced they anticipate running out soon. they will just the loan at a later date since they know eventually the funds will be there.

 

I got a memo yesterday saying there would be no interu[ption in service- I am grateful as this is in my opinion the best program out there.

 

B

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Brian B The Loan Professor
Mortgage Banker Lending in all 50 states -
Valued Contributor
WannaHouse
Posts: 1,080
Registered: ‎06-08-2008
0

Re: USDA 502 loan income limit modification

Just to clarify a bit....

 

There are 2 different single family programs:

 

http://www.rurdev.usda.gov/rhs/sfh/indiv_sfh.htm#Direct%20Loan%20Program%20(Section

 

 

Direct Loan Program (Section 502)

Under the Direct Loan program, individuals or families receive direct financial assistance directly from the Housing and Community Facilities Programs in the form of a home loan at an affordable interest rate.

Most of the loans made under the Direct Loan Program are to families with income below 80% of the median income level in the communities where they live. Since HCFP is able to make loans to those who will not qualify for a conventional loan, the HCFP Direct Loan program enables many more people to buy homes than might otherwise be possible. Direct loans may be made for the purchase of an existing home or for new home construction.

 

 

Loan Guarantee Program (Section 502) 

Under the Guaranteed Loan program, the Housing and Community Facilities Programs guarantees loans made by private sector lenders. (A loan guarantee through HCFP means that, should the individual borrower default on the loan, HCFP will pay the private financier for the loan.) The individual works with the private lender and makes his or her payments to that lender.

Under the terms of the program, an individual or family may borrow up to 100% of the appraised value of the home, which eliminates the need for a down payment. Since a common barrier to owning a home for many low-income people is the lack of funds to make a down payment, the availability of the loan guarantees from HCFP makes the reality of owning a home available to a much larger percentage of Americans.

 

 

 If the OP is applying for the GUARANTEED program, then the money is no issue...the money comes from your choice of lenders.

The DIRECT program is where the money comes from the USDA directly.

 

 


Hope that helps a bit.

 

 


Kathy


We are finally homeowners!!

Closed May 5th-30 yr fixed at 5.25%.

Established Contributor
CanDoAttitude
Posts: 878
Registered: ‎04-08-2008
0

Re: USDA 502 loan income limit modification

[ Edited ]

That's an excellent point, Brian. Thanks for bringing it up.

 

Depending on the lender, people can still apply for USDA loans at

their local bank, credit union, etc. But they won't be able to close

until Section 502 funding resumes on/about March 20th, 2009.

Banks have the money, but the USDA must guarantee the loan.

 

And for people making offers on homes, they can make them

contingent on USDA financing. At least this way the offers will

be in the pipeline and ahead of everyone else who's just looking

but not serious....

 

CanDo

 

"The right attitude is everything"

Message Edited by CanDoAttitude on 01-07-2009 01:39 PM
Established Contributor
granny031350
Posts: 951
Registered: ‎12-04-2007
0

Re: USDA 502 loan income limit modification

good to know.  My LO just told me today that the government has to reauthorize the money and I posted a question about it.

 

 

In addition I ask about the bankruptcy criteria.  On the specs website (Michigan) it stated 3 years discharge for chapter 7 AND chapter 13.  I am getting my discharge for chapter 13 and am HOPING that I can apply for USDA.  BK was FILED in August 05 but won't be discharged until late Feb/early March.

 

thanks


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