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03/05/2014 - I recieved an "appraisal letter" from the USDA. It seems the USDA (shockingly) jumped the gun and ordered an appraisal of the home before we even had a finalized contract.
The letter states, "Based upon your repayment ability and our appraisal, we have determined we would be willing to loan up to $(contract price). THIS IS NOT TO BE CONSIDERED APPROVAL."
The letter also included a list of required repairs: "Interior of the garage and the house is in need of fresh paint and minor sheetrock repair."
I immediately called the USDA office to ask about closing costs, since the letter says the appraisal came in exactly at our contract price. I also asked her why she ordered the appraisal while we were still in attorney review. It turns out that the appraisal came in at $1,000 over our contract price. I asked if the additional $1,000 could be used for closing costs, and she told me flat out "No". She told me that closing costs must be specified in the contract if the are to be financed. She also had no explanation as to why the appraisal was ordered prematurely.
I have sent her the pages out of the USDA Direct Single Family Housing Loans and Grants Field Office Handbook where it states that the following:
And just like that, the deal is dead. Someone else made an offer on the house over the weekend and the seller accepted it. I don't know any details except that it was one of the seller's agent's clients - she's now a dual agent and will earn a double commision on the deal - and that the offer was higher than ours. She wouldn't tell my agent what the numer is, so there's no realistic way we can counter. Since it's in her best interest for this new deal to go through and there's really nothing we can do, we withdrew our offer on the recomendation of our agent.
I guess it's back to looking for a house. This sucks.
Ahhh that sucks!!
same here- the house we loved we were going to make a bid today...but had to wait for my realtor to call usda to see how to write it up. They pulled bidding yesterday- INSTEAD of thursday like the deadline said...so we now have to look at a house 200sqft smaller, the yard is 2000sq ft smaller and it is 10K more.
i am so bummed- there are only like 3 houses in our area anyway, and they keep disappearing.
Dantheman77 did you find anything over the weekend?
Nothing here :/ Nothing went on market since last weekend.
No, nothing yet. It's hard to find anything in decent shape that's big enough for us and is also in our price range. Our intiial 45 days for our COE ends today, se we're getting our first extension. We've decided not to rush things. Even though we'd love to find a house ASAP, in the long run we'll regret buying something that we don't really love just because we felt like we were running out of time. We have another 60 days... if we don't find something within that time frame we'll just start the process all over again.
I hope you find what you are looking for and won't have to start over!
I am afraid we will just give in so we can get something - hoping to move again in 3 years- but because of the recapture, we need to find something that will build equity for sure.
oh! That is good to know!
I feel like we can find something "ok" for now and then in 3 more years maybe we will financially be able to get more then. Even if we do have to do a little bit of recapture.
@rideswithchrist1 wrote:oh! That is good to know!
I feel like we can find something "ok" for now and then in 3 more years maybe we will financially be able to get more then. Even if we do have to do a little bit of recapture.
I would be very careful with this plan if I were you. With 100% USDA financing, there will need to be a substantial increase in your property's value for you to be able to sell within three years and not need to bring cash to the closing table. Personally I don't think it's worth buying something that you can't see yourself living in for at least five years.
We found one that we can see ourselves in for 5-10 years, or at least until we get money to get a farm/some acerage.
How is your search going?