I am in the midst of a USDA Direct 502 mortgage. I thought I would begin to chronicle this for those who might be interested. My advice to anyone seeking this loan would be to be prepared. Have your tax returns, paycheck stubs, bank statements and anything else the underwriter/loan processor needs ready to go. The timeline for this loan can be long, so don't hold it up by not having all of your ducks in a row!
Faxed initial application: 1-11-2012. This is a one page application and they do run a TransUnion 2004 credit report to see if you are "initially" eligible. If you are, they will ask you to fill out the application and return it with your financial documentation. This would include 2 years tax returns, 2 months bank statements, and your last 4 paycheck stubs. I have a bankruptcy (chapter 7) that is not even 2 years old-so I knew that I would need a "mid" score of at least 640 to qualify. This mid score (if all of your other credit issues qualify) can get you through their streamline process and the minimum seasoning for things like BK etc. can be overlooked.
Received response indicating I was selected for further processing (US Mail): 1-14-2012. Returned complete application on 1-16-2012 and on 1-17-2012 CBC Innovis ran my 3 bureau tri-merge report, and also called my employer to verify my employment! I had just turned in my employer's verification the day before. That was fast!
Received certificate of eligibility: 1-25-2012.
Turned in purchase agreement: 1-31-2012. I had been searching houses with the help of a real estate salesperson for a few weeks, so I knew what I wanted to look at. I had begun to prepare so I could move fast.
1-31-2012: waiting for appraisal.
Everyone at the USDA office is exceptionally kind and helpful. I have never encountered a group of people so kind, patient, and willing to help. It is by the grace of God I'm come this far and I'm grateful to all at USDA that have patiently answered my many questions. I am really blessed!
To be continued.....
Just wanted to say thanks for doing this and please keep it up! I'm in the market for a mortgage soon-ish, and being in a universally rural area, the USDA loans may be my ticket, so this kind of knowledge is invaluable.
Thanks so much for this post! I am going through the process as well. I was so afraid about the credit, and I still am. I am wondering a few things. When they pulled the initial credit, they told me I had to pay off a small bill that was showing, so I took care of it within a week. Then when I returned the full application I noted that it had been taken care of and I am waiting for a confirmation letter of it being removed. When they pull the second credit, if more shows up and I am pretty sure some things will,
will I be able to pay those and move along in the process, or will they curb me fast and deny me? I called today to make sure they had gotten the full application, and I was told it was recieved and they needed at least a few days to go over it before they could say anything, and that I would recieve a letter in the mail probably in about a week. I have no fingernails left, I am so worried. I had my credit pulled during the homebuyer program course. It wasn't good, but very small collection accounts that we could easily take care of quickly. So, do youthink when they see them they will let us just pay them?
if they sent you the full application than I would gather that they didn't find anything that was going to be a dealbreaker at that point. If you read Chapter 4 of their handbook, you can read about the credit standards and what they will overlook. The link is below.
I found that if I had any questions that I could simply call my local USDA office and the people there answered every question I had. So don't be afraid to just call and ask. They're nice people....
Wow your initial process went much quicker than mine did! The office you are using obviously makes a diff (I am in NY).
I wish I had your office I guess! The office I am having to work with has been nothing but UNHELPFUL. Originally I submitted a prequal and was told my FICO was to low but all the things I had to do to qualify. THEN I got my score up to 640 which is what they require (although I didn't realize the score is a little diffrent from here and apparently a 636). They didn't even call me. Didn't send a letter send up smoke signals NOTHING. Finally I followed up with them THEN the lady that called me back said I had to wait another year with no explination didnt tell me my score anything. I swear I emailed the state director to finally get a person that was nice and helpful to call me back and go over everything with me. She was great, but not who I will be working with once I do qualify! I just want to beat my head on a rock!
Also, thank you very much for posting that handbook. I have been looking all over for that!!!
Ktlynn I am sorry that you are having such a hard time. I know that I have had a terrible time financially for the past 5 years and even when I thought I was ready for a mortgage, I wasn't.
If you aren't able to get the mortgage now, just keep on planning and saving. You will be glad you did. I really read that USDA handbook backward and forward and knowledge is power! There is another poster here named "macbookguy" and his posts about his USDA experience are wonderful and I would urge you to look him up using the search function on this board.
I wish you all the best and I know as diligent as you sound through your posts, that you will get there! My credo was "they can't say no forever" because I knew after a certain amount of time had elapsed after my credit struggles, that I would be able to get that mortgage. Keep that in mind and don't create any new credit problems, and you will get there!
Good luck Iam!