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USDA Direct Pre Application Questions

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maluba
Regular Contributor

USDA Direct Pre Application Questions

So, we got the pre app for the USDA direct loan today and I had a few questions. We looked at a house earlier this week, something we really didn't plan to do and we're pretty much in love. It's going for $90,000. The seller is pretty motivated because she wants to move out of state because the house next door to her daughter's just went up for sale. I'm not going to lie, I feel like we should jump on it, but I know the best thing to do is be pragmatic.

 

Questions: 

 

1. We have 2 children and I'm 36 weeks with our third. I notice on the app they want a list of the kids under 18 living with us. Should we wait until I give birth before we turn in the app? And can someone explain what the $480 child allowance means?

 

2. Our tax refund should be here by the end of the month. Would that have an impact re: amount of money in our accounts vs yearly salary?

 

3. How long should money in accounts be seasoned? We were directly affected by the shutdown, so we haven't been able to put money into our savings account since November. We'd at least like to show that we are able to put aside money each month under regular circumstances. 

 

That's all I can really think of now. Thanks in advance for the responses!




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13 REPLIES 13
maluba
Regular Contributor

Re: USDA Direct Pre Application Questions

Bump! Smiley Happy

 

ETA, credit score is higher now, 630. It can be higher, once we pay down our cards. 




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Message 2 of 14
rideswithchrist1
New Contributor

Re: USDA Direct Pre Application Questions

Wow- those a great questions!

  I would find your local office and email or call them for sure. 

The DIRECT Loans may not be funded in your area right now either. I am 30th on a waitlist here in Texas, so I may not even get my loan funded when funds are released...so if you loce that home and can get it with a USDA Guaranteed, think about that route. For us, the Direct is the only way we can get a home right now.

Message 3 of 14
maluba
Regular Contributor

Re: USDA Direct Pre Application Questions

I think that's what I'll end up doing. The offices have been closed for the week because of the weather. They should be opened by Friday, though. I wanted to see if the Direct or Guaranteed would be more helpful to us. Thanks for replying Smiley Happy




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Message 4 of 14
maluba
Regular Contributor

Re: USDA Direct Pre Application Questions

The offices should be opened tomorrow, but does anyone have any possible answers?




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Message 5 of 14
DanTheMan77
Regular Contributor

Re: USDA Direct Pre Application Questions

Eligibility is based on your adjusted income. Your adjusted income is your total income minus $480 per dependant. With two kids you would subtract $960 from your total income to get your adjusted income; with 3 kids, subtract $1,440. USDA provides a calculator so you can plug in your own numbers to see the impact of an additional child and then decide what's best for you: http://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do?pageAction=state&NavKey=i...

 

The number of kids doesn't make much difference in your adjusted income, but it make a bigger difference in the income limit. For example, in my county, the income limit increases by $3,750 per household member. Also, remember that income is based off of all adults in the house, even if they aren't on the loan. Tax refunds don't count as income so that will have no impact on ratios. Seasoning of funds is usually two months, but I don't think USDA requires it. They don't care if you have any reserves (although it's a good idea) or have a history of being able to save.

 

FYI, seasoning usually applies to gifted funds. If it's your own money that you're saving, there's no time period. The point of seasoning is to make sure you didn't take out a loan that isn't refelcted on your credit report yet.

 

Hope that answers some of your questions. Good luck!

Message 6 of 14
maluba
Regular Contributor

Re: USDA Direct Pre Application Questions

Thank you very much Smiley Happy 

 

That helps a lot!




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Message 7 of 14
maluba
Regular Contributor

Re: USDA Direct Pre Application Questions

What is the USDA's stance on debts? Is it the same as the FHA's guidelines discussed here? I would have called back and asked but they were closed today Smiley Sad

 

I feel so overwhelmed by the process. 




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Message 8 of 14
ShanetheMortgageMan
Super Contributor

Re: USDA Direct Pre Application Questions


@maluba wrote:

What is the USDA's stance on debts? Is it the same as the FHA's guidelines discussed here? I would have called back and asked but they were closed today Smiley Sad

 

I feel so overwhelmed by the process. 


What kind of debts?

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Message 9 of 14
maluba
Regular Contributor

Re: USDA Direct Pre Application Questions

One from Midland at slightly below $4000 and another from Asset Acceptance for less than $1500. These are about four years old. 




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