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Established Member
Posts: 32
Registered: ‎04-04-2017
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USDA Direct Loan 502 LOE

[ Edited ]

Hi all I applied for a direct loan section 502 through USDA at the beginning of April. I do have negative items on my credit report. I've read here that you need at least a mid 640 score so I don't know if i will qualify since my mid mortgage score is way under that. First I received a letter requesting one more bank statement, a signature on a sheet I left out and one more form for IRS and I sent that in. My credit report reflected the credi pull almost immediately. After that I received a letter stating my application had been selected for processing but that needed a letter of explanation for the negative items on my credit report which I expected and that i only have 15 days to respond.

What do you all think are the chances of an approval after this? I sent the LOE today. Thank you!

 

Application rcvd 4/7/17

hard mortgage credit inquiry hit same day 4/7/17

letter for needed documents emailed 4/10/2017/response emailed 4/10/2017

Selected for processing letter of explanation rcvd some time last week hadn't checked the mail dated 4/7/17

emailed LOE 4/17/17 

UPDATE 05-11-17! I just called and I was denied Smiley Sad oh well it's not my time. I'm not too surpsied since I knew I had credit issues.Which is exactly why I was denied for unacceptable credit. Thank you to all who have answered my questions now to work on my credit report!

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Established Member
Posts: 32
Registered: ‎04-04-2017
0

Re: USDA Direct Loan 502 LOE

somedbody...anybody

Regular Contributor
Posts: 116
Registered: ‎02-24-2017
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Re: USDA Direct Loan 502 LOE

They wouldn't ask for a LoE if they were not considering approval. You can check in with your LO and see if its been submitted to underwriting yet
Established Member
Posts: 32
Registered: ‎04-04-2017
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Re: USDA Direct Loan 502 LOE

Thank you @dvasil for commenting i really appreciate it! To be honest I don't know who my LO is because no one has introduced themselves as that. So far I have spoken with 1 lady mainly and my request for LOE came from another person and when I sent my LOE I emailed her asking to confirm she received it and asked her a couple of questions. She only replied, "received" and that's it. But I spoke to the only other woman I've ever spoken to on Friday and she said they have everything now and the only thing left to do is verify information and then make a decision. She said it can be another 30days. But she said that depends that she's seen a couple days, couple weeks or 30 days but to call back in 2 weeks to give them time. Is the verification process underwriting?
Member
Posts: 15
Registered: ‎03-15-2017
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Re: USDA Direct Loan 502 LOE

I'm am doing a USDA guaranteed so my experience has been a little different. However, I think verification would be the preapproval process as you can't fully go into underwriting for final approval until you have a purchase contract on a property and that property has been appraised. Best of luck to you and hope get good news soon!  The waiting and worrying is always the worst. 

Established Member
Posts: 32
Registered: ‎04-04-2017
0

Re: USDA Direct Loan 502 LOE

Thank you @singlemom76 Smiley Happy okay hopefully I get good news! You know I want to say the woman I spoke to did call it underwriting for verification process but I don't want to think too far ahead. Best of luck to you too!

Regular Contributor
Posts: 116
Registered: ‎02-24-2017
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Re: USDA Direct Loan 502 LOE

Some banks do underwrite their pre-approvals, this is good news as you wi ll be able to buy with confidence knowing exactly what you are approved to buy. Hang in there
Established Member
Posts: 32
Registered: ‎04-04-2017

Re: USDA Direct Loan 502 LOE

Thank you @dvasil! Hopefully I can get some good news God willing Smiley Happy I will update as soon as I do.

Contributor
Posts: 109
Registered: ‎08-16-2014
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Re: USDA Direct Loan 502 LOE

HI! I have been working on my credit to apply for this exact loan and am surprised to hear they seem to be moving forward with below 640 mid score with negatives. May I ask what kind of negatives you have and how old? My score is below 600, and I have 5 negatives all 2+ years old. Two of them will be deleted soon, so by the time I apply for this loan (if I apply) I will have 3 negatives, the most recent being 2015. No repo's, no foreclosures, no judgements, etc. and I have 2 years of rental history with my current landlord (property management company) I read if you have less than a 640 you can't have any negatives, and you have to be able to provide proof of on time rent payments for 2 years. I'm hopeful now reading your post that I too could maybe get this process going with my few negatives.

Established Member
Posts: 32
Registered: ‎04-04-2017
0

Re: USDA Direct Loan 502 LOE

Hi Jade1202 I'm not sure if I will be approved just yet becuase of my credit scores and situation. However I felt I would give it a try since I saw a few posts on here where some ppl did have a couple of collections or negatives. I have 4 collections all older then 2 years but I do have other negative factors maybe 1 year old. I don't have any repos, judgements, foreclosures, bankruptcies or broken leases or anything like that. I have been employed with the same employer for almost 4 years and I have been in the same field of work for over 9 years. I've lived in the same apartments for almost 3 years and rental history is good no 30 days or more lates ever in any rental place. I do have a good income about 53K they don't count overtime I read somewhere but I'm not sure so I would be around 48K. I hope this helps. Best of luck!

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