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Valued Member
jrporterfield
Posts: 28
Registered: ‎04-05-2010
0

USDA Loan Scenario Can we be approved in 6 months to a year?

[ Edited ]

Wondering if a LO would approve a USDA loan for us even though I can't pull Fico scores for DH? We meet the income and property limits for the USDA. If my info is included in DTI that may cause a problem.  Ok here is the scenario:

 

My Credit

 

HSBC CC      - (bal) $282 $221(limit) $300

Fingerhut       - (bal) $0  (limit) $500 (closed/transferred) Bought by Metabank

Quad Loan    - (bal) $7056  (limit) $9441  (2 years left to pay)

Dept of Edu   - (bal) $1753   (1 60 late in Oct 2008)

Dept of Edu   - (bal) $2226   (1 60 late in Oct 2008)

AES                 - (bal) $2786  (1 60 late in Oct 2008 and 1 90 late in Nov 2008) DEFERRED  Oct 2010

AES                 - (bal) $2786  (1 60 late in Oct 2008 and 1 90 late in Nov 2008) DEFERRED  Oct 2010

 

Med Collection   - $177  (service date  1/31/2006)

Med Collection   - $  76  (service date    8/2007)

Med Collection   - $  50  (service date    8/2007)

Med Collection   - $  26  (service date   10/2005)

 

DH Credit

 

1st Premier CC    -  (bal) $75 (limit) $300 (opened 4/2010)

GCFCU Loan        - (bal) $1200 (limit) $1500

Quad Loan            - (bal) $7056  (limit) $9441  (2 years left to pay)

 

Collection/Sprint         - $361.03 (Orig amt owed-dispute 1 month service and $150 cancellation fee was on month-month basis and told them to stop service) $432/CA

 

 

Income is as follows:

 

DH $1516.66/month (or $18,200/year  ) 

Me    $808.00/month

 

Down payment/closing cost (no down payment for USDA) would be $5000. Looking to spend no more than $80,000 ($50,000 would be ideal) Lol!  Any advice besides removing baddies and lowering utilization could pay off personal loan within 6 months but quad loan is for 2 more years and currently no extra income to pay towards it.

 

 

TrueCredit Scores for DH

 

EX  -   643

EQ  -   630

TU  -   672

 

TrueCredit Scores for Me

 

EX  - 600

EQ  - 596

TU  - 603  609

 

Fico Scores for Me (as of 4/29/2010)

 

EQ  -  583

TU  -  605

 

Waiting until 5/29/2010 to repull my Fico's  but without DH CC being 6 months old can't pull his.  Looking to apply for the loan in approx. 6 months to a year.  I need a job for 6 months before anyone will use my income.   Any advice will be greatly appreciated.  Selling a piece of property I inherited (closing date 7/15/2010 hope to speed this up) was sold that will give us the $5000 towards dp/cc and the rest to finish paying off any collections/cc utilization etc.


Starting Score: TU: 615 EQ: 590 EX: 611(Fako)
Current Score: TU: 615 EQ: 603 EX: ? (Fako)
Goal Score: 650 across the boards


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New Contributor
freudandbeck
Posts: 97
Registered: ‎05-03-2010
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Re: USDA Loan Scenario Can we be approved in 6 months to a year?

[ Edited ]

You probably qualify for a Direct Loan and have a good chance of getting approved for 60, 000.

Valued Member
jrporterfield
Posts: 28
Registered: ‎04-05-2010
0

Re: USDA Loan Scenario Can we be approved in 6 months to a year?

Wow! Is that based on current info or the 6 month to a year time period.


Starting Score: TU: 615 EQ: 590 EX: 611(Fako)
Current Score: TU: 615 EQ: 603 EX: ? (Fako)
Goal Score: 650 across the boards


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New Contributor
freudandbeck
Posts: 97
Registered: ‎05-03-2010
0

Re: USDA Loan Scenario Can we be approved in 6 months to a year?

Current. I am not an expert though.

 

There are too many ifs to project 6 months from now based on the information youy have provided. How much will you make? What debt will you have remaining. Will you have paid off any of your current loans or taken out any new ones? You will also need to consider any monthly payments you have, such as car payments.

 

 

New Contributor
freudandbeck
Posts: 97
Registered: ‎05-03-2010
0

Re: USDA Loan Scenario Can we be approved in 6 months to a year?

Rural Housing Direct Loans are loans that are directly funded by the Government.   These loans are available for low- and very low-income households to obtain homeownership.  Applicants may obtain 100% financing to purchase an existing dwelling, purchase a site and construct a dwelling, or purchase newly constructed dwellings located in rural areas.  Mortgage payments are based on the household's adjusted income.  These loans are commonly referred to as Section 502 Direct Loans.

Purpose:  Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.

Eligibility:  Applicants for direct loans from HCFP must have very low or low incomes.   Very low income is defined as below 50 percent of the area median income (AMI); low income is between 50 and 80 percent of AMI; moderate income is 80 to 100 percent of AMI.  Click here to review area income limits for this program.  Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance, which are typically within 22 to 26 percent of an applicant's income.  However, payment subsidy is available to applicants to enhance repayment ability.  Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories. .

Terms:  Loans are for up to 33 years (38 for those with incomes below 60 percent of AMI and who cannot afford 33-year terms). The term is 30 years for manufactured homes. The promissory note interest rate is set by HCFP based on the Government’s cost of money.  However, that interest rate is modified by payment assistance subsidy.

Standards:  Under the Section 502 program, housing must be modest in size, design, and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards.

Approval:  Rural Development officials should make a decision within 30 days of the Rural Development office's receipt of the application.

Valued Member
jrporterfield
Posts: 28
Registered: ‎04-05-2010
0

Re: USDA Loan Scenario Can we be approved in 6 months to a year?

Well other than normal household expenses (rent, water, elec., cable, car ins., cell phone, garbage) these are the only other items we owe.  Our vehicles are free and clear.  Exactly what bills do they take into consideration when they do DTI other than cc, loans, etc?


Starting Score: TU: 615 EQ: 590 EX: 611(Fako)
Current Score: TU: 615 EQ: 603 EX: ? (Fako)
Goal Score: 650 across the boards


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Valued Member
jrporterfield
Posts: 28
Registered: ‎04-05-2010
0

Re: USDA Loan Scenario Can we be approved in 6 months to a year?

BUMP!


Starting Score: TU: 615 EQ: 590 EX: 611(Fako)
Current Score: TU: 615 EQ: 603 EX: ? (Fako)
Goal Score: 650 across the boards


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Valued Member
BlackBellamy
Posts: 45
Registered: ‎01-21-2010
0

Re: USDA Loan Scenario Can we be approved in 6 months to a year?

[ Edited ]

 


jrporterfield wrote:

Well other than normal household expenses (rent, water, elec., cable, car ins., cell phone, garbage) these are the only other items we owe.  Our vehicles are free and clear.  Exactly what bills do they take into consideration when they do DTI other than cc, loans, etc?


All the information about USDA loans can be downloaded from here http://www.rurdev.usda.gov/regs/hblist.html

 

Here's the relevant information from chapter 4:

 

 

 

HB-1-3550Paragraph 4.22 Determining Repayment Ability [7 CFR 3550.53(g)]


B. The TD Ratio


1. Maximum TD Ratio
The TD ratio compares applicant debt to repayment income. Applicants, regardlessof income, are considered to have repayment ability when they do not have to spendmore than 41 percent of repayment income on total debt.


2. Establishing TD
Total debt includes PITI, all long-term obligations, and short term-obligations thathave a significant impact on repayment ability. The following items should be counted:


• PITI -- Principal, Interest, Taxes, and Insurance (including leverage loan payments);


• Regular assessments, such as homeowner assessments;


• Long-term obligations with more than 6 months repayment remaining, includingloans, alimony, and child support;


• Payments that come due in the next 12 months;


• Deferred debt regardless of the length of the deferment period. Examples of deferreddebt are items purchased under a retailer’s “no payments until” offer and studentloans where repayment has not commenced since the borrower is still in school. Ifthe credit report does not reflect the anticipated monthly payment due at the end ofdeferment, the Loan Originator should obtain verification of the monthly paymentdirectly from the creditor or request a copy of the loan agreement from the applicant.For student loans, the monthly payment can be estimated using 1 percent of the loanbalance report on the credit report if the other verification methods are not feasible.


• The minimum monthly payment required for revolving credit card debts;


• Short-term obligations that are considered to have a significant impact on repayment ability, such as large medical bills and car or other credit payments.

Established Contributor
rmily
Posts: 670
Registered: ‎07-12-2008
0

Re: USDA Loan Scenario Can we be approved in 6 months to a year?

Your scores could use a little boost as you probably already realize.  I personally would take care of those medical collections through the HIPAA process sooner rather than later since they're so small and they have to be removed when paid.  You should get a few points and a cleaner report.  They may not be required to be taken care of so if you're really strapped for cash you could ignore them awhile longer..  You should also get the points you need as utilizatin comes down.  I wouldn't worry about paying off the personal loans any faster unless you can't get the purchase price you want and need to improve DTI.  Good luck!  Sounds like you know what you need to do and you're on the right track.

Valued Member
jrporterfield
Posts: 28
Registered: ‎04-05-2010
0

Re: USDA Loan Scenario Can we be approved in 6 months to a year?

Thank you for your words of wisdom and advice.  I greatly appreciate everyone's assistance.  I am just afraid that we won't get approved due to DTI or my husbands lack of credit history.  We do have a few credit sources that are not reported to credit bureaus so that may help his credit history.  We will keep plugging along and eventually realize our dream of owning our own home.  We have been married for 13 years and are really tired of paying rent.  LOL!


Starting Score: TU: 615 EQ: 590 EX: 611(Fako)
Current Score: TU: 615 EQ: 603 EX: ? (Fako)
Goal Score: 650 across the boards


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