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Regular Contributor
Posts: 167
Registered: ‎01-06-2014
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Re: USDA Direct after BK... Here's my story

[ Edited ]

01/30/2014 - I got my Certificate of Eligibility this morning! It does mention that the maximum permitted house size is 2,000 sq. ft. The two houses we are looking at are both bigger than that. We have five kids and need a four bedroom house. It's almost impossible to find a four bedroom house that's under 2,000 sq. ft. I asked if they can grant a waiver and here's the response: 

 

You would need a letter addressing the reason(s) you believe you should be granted a waiver for the sq. ft. limitation of 2000 sq. ft., such as your family size, a household member with a disability, etc.  In addition to your request, you will have to obtain actual utility cost for the past 12 months (all utilities, electric, gas, water, sewer, etc.)

 

Seems like one more hassle to deal with, but I guess I don't have a choice. I can't imagine that they would haggle over 50 sq. ft. but then again it is the Federal government we're talking about here.

Regular Contributor
Posts: 167
Registered: ‎01-06-2014
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Re: USDA Direct after BK... Here's my story

[ Edited ]

01/12/2014 - USDA hasn't processed my request for the sq. ft. waiver so I contacted them and asked if it would be OK to make an offer on the house without the waiver. They told me that the process usually works that way (i.e. offer before waiver). They said that they hadn't processed it because they weren't sure if they could without a signed contract, and were waiting for advice from the state director. Why they didn't tell me that in the first place, I don't know. Anyway, we submitted our offer this morning and are waiting to hear if it is accepted. It's a short sale, so it's likely that the seller will accept it. Once the offer is accepted, we will submit the contract to the USDA and try to get the waiver approved. Then we just wait for bank to process and approve the short sale. Praying it all goes smoothly, but certainly not holding my breath.

New Member
Posts: 4
Registered: ‎01-21-2014
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Re: USDA Direct after BK... Here's my story

How's the process going? Was your offer accepted and has USDA done anything about the waiver request yet?

Starting scores: August 23, 2013: EX: 603; EQ: 684; TU: 644
2 month improvement scores: Nov. 4, 2013: EX: 695; EQ: 719; TU; 628
4 month improvement scores: January 2014: EX: 721; EQ: 721; TU: 644
Current scores~ March 13, 2014: EX: 721; EQ: 721; TU: 669
Regular Contributor
Posts: 167
Registered: ‎01-06-2014
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Re: USDA Direct after BK... Here's my story

[ Edited ]

02/12/2014 - I heard back from the USDA about the sq. ft. waiver. They said since it was only slightly over the limit they wouldn't need to go through the waiver process after all since it was "close enough" per the state office.

 

02/13/2014 - We made an offer on the house.

 

02/15/2014 - The seller countered our offer, we countered back and told them that was as high as we were willing to go and that it was our final offer. I think it may be a little tough to get the appraisal to come in where we need it.

 

02/19/2014 - Seller verbally accepted our offer. We signed revised contracts and are waiting for the seller to sign before we can send them off for attorney review.

 

 

New Contributor
Posts: 100
Registered: ‎02-04-2014
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Re: USDA Direct after BK... Here's my story

That is great to hear! The property we are looking at is also a Short Sale- CASH? Which I am not sure what that means so it is great to follow you.

 

Are you having to wait for the bank to approve the offer, or is it already bank approved? Can't wait for another update from you. This Direct is no joke!

Regular Contributor
Posts: 167
Registered: ‎01-06-2014
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Re: USDA Direct after BK... Here's my story

[ Edited ]

02/25/2014 - The seller signed the contract today so our attorney should have it by the end of the day and will begin the review process. The seller is using a short sale negotiator so things are moving very slowly. In addition to the contract, they asked us to sign several additional documents from the negotiator. Among these was an agreement to use a "preferred" mortgage company and title company, as well as pay a "negotiation fee". We refused to sign all of these documents, which delayed the process, however the seller eventually accepted the offer anyway.

 

Since the short sale has not yet been approved by the bank, the contract gives the seller 5 days to collect the needed documentation and submit it to the bank for approval. We've been told to expect that it can take anywhere from 30-90 days for the bank to respond so we're in store for a lot of waiting. Hopefully this will work to our benefit and allow the USDA funding to come through while we wait.

 

For those interested in my costs along the way, I'll also try to keep a running total of them here as well. Today I placed $1,000 into escrow with my attorney to serve as my earnest money deposit. As you would expect, this is my first real expense related to the sale, except for the credit check fee.

 

$      32 - USDA Credit Check Fee (12/30/2013

$1,000 - Earnest money Depost (2/25/2014)

$1,032 - Total "Out of Pocket"

 

Regular Contributor
Posts: 167
Registered: ‎01-06-2014
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Re: USDA Direct after BK... Here's my story

[ Edited ]

02/26/2014 - I got thrown for a loop today. I got an email from the person at the USDA I had been working with telling me that my file is being handed off to someone in another office. She also asked that I send both of them a copy of the sales contract. I sent it over right away and got a response within a few minutes from the new person that the property exceeds the loan maximum because the taxes are too high. I think the new person is confused - at one point previously I had asked them to calculate an estimated payment for a house we looked at but ended up not making an offer on. I believe that somehow this information got entered into my file incorrectly and is now showing up as the max loan amount. Thankfully the original USDA rep thinks she can straigten this out. In the mean time I almost had a heart attack! I should now the outcome by tomorrow.

Regular Contributor
Posts: 167
Registered: ‎01-06-2014
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Re: USDA Direct after BK... Here's my story

02/27/2014 - USDA has confirmed that there was an error on their part and that my approval covers the actual sale price and property taxes. Phew! We're still in attorney review and waiting on final contract. My agent said we might be out of attorney review by tomorrow, but I doubt it. I'm thinking it will be at least a week.

New Contributor
Posts: 100
Registered: ‎02-04-2014
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Re: USDA Direct after BK... Here's my story

That is good to know, I have $2500 set aside for "closing". 

 

You are getting very close!

Regular Contributor
Posts: 167
Registered: ‎01-06-2014
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Re: USDA Direct after BK... Here's my story

03/03/2014 - I recieved my Good Faith Estimate and Truth in Lending Statement from the USDA in the mail. Closing costs are estimated to be approx. $5,500. This includes the appraisal ($425), tax service fee ($102), home and pest inspection ($825), excrow deposit ($2,000), homeowner's insurance ($800), title insurnace ($1,000) and recording fees ($350). I'm hoping that the appraisal comes in high enough that all of these can be wrapped into the loan. 

 

At the bottom of the first page of the GFE, it says "Total Estimated Settlement Charges = $0.00." I thought that the homeowner's insurance and home/pest inspections needed to paid prior to closing. Does anyone know if it's possible wrap these into the loan as well? From the GFE it seems like they are saying that they can be included, but I'm not sure if there's a mistake or I'm just reading the GFE wrong. Any help would be appreciated.

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