Reply
Valued Member
OaimeeO
Posts: 49
Registered: ‎01-05-2009

USDA Success stories

Can anyone give us some insight to success stories with USDA loans? DH and I are filling out the application right now but we are afraid our bad payment history will affect us from qualifying.

Anyone have experience with repair while going through the USDA process?

Contributor
BSBRose21
Posts: 78
Registered: ‎10-31-2007

Re: USDA Success stories

I just closed on my house with a USDA guaranteed loan through Chase. If you have above a 620 middle score, you will be golden as far as credit.  41% is the recommended debt to income ratio. Let me know if you have any questions. I learned every in and out with USDA loans with my mortgage broker who was great!
Established Contributor
CanDoAttitude
Posts: 878
Registered: ‎04-08-2008

Re: USDA Success stories

[ Edited ]

Hi BSBRose21, :smileyhappy:

 

First of all, Congratulations on becoming a homeowner!!! :smileyhappy:

You now own a piece of Americana!

 

I think I'll take you up on your offer for information, if you don't mind:

 

1) Besides JPMorgan Chase, does your mortgage broker know what other

major US banks are currently making USDA Guaranteed Loans? As you

know, some banks are funding/closing these loans, while others are waiting for

USDA's temporary funding to come thru on/about March 20th, 2009.

 

2) The USDA's income charts are from March of 2008 (fiscal year 2008).

Do you know if the USDA has come out with the modified income charts

for FY2009, or did your lender base your mortgage on last year's income charts?

I'm asking because there is a young married couple here in the forum from

the DC area. They are about 3k above the current limit, but they should be able to

qualify for a mortgage when the charts are modified for FY2009.

 

That leads to my final question:

 

3) We know that an applicant's income cannot exceed 115% of a local area's

"median income". But given that fact, is there an income waiver available if

applicants are close to the limit but still exceed it by a small margin?

Do compensating factors like being a teacher, firefighter, medical professional,

police officer, etc. come into play at all?

 

Thanks for the offer of fielding questions, BSBRose. These loans are HOT

right now, so the more information you and your mortgage broker can provide

to us the better.

 

Once again, Congrats on becoming a homeowner. Enjoy the day!!! :smileyhappy:

 

CanDo

 

"The right attitude is everything" 

Message Edited by CanDoAttitude on 01-15-2009 03:13 AM
Valued Member
OaimeeO
Posts: 49
Registered: ‎01-05-2009

Re: USDA Success stories

BSBRose21, thanks for the insight! That's great to see still some approvals!

DH and I are working on getting our scores up to get the auto approval, but I am hovering w/a mid score of 580 right now and DH's is way worse. We are going to do a few PFD and sending out a few prehippa letters since I just got my hard copies printed this week. Hopefully that will help increase our score. We are praying that we can increase before the June 30th cut off for the tax loan/credit.

I have the information for the Direct loan to fill out here at home, but I was thinking I'd wait till our credit got a bit better. Do you think I should just send it now? Or wait a month or two?

Also, I'm curious how they figure in how much loan they will give you. The woman on the phone said with no debt and a 55,000/year income we'd qualify for 316,000. That just seems like a HUGE amount that they'd be willing to give!

We will be monthly debt free after tax returns except one auto loan for $370/month with 12 months left to pay. All cc's are pif every month and we have no other loans.

We are drooling over a house in the rural area (so I think it will qualify for USDA) and it is for $239,000.

Will a regular local loan officer know about the guidelines through USDA? I want to meet w/someone to get all my questions asked but the local USDA office said they wouldn't meet w/us till we filled out the application and submitted it.

Any answers to my hundreds of questions are completely appreciated!!! Especially from those who have gone through this process.

 

Contributor
BSBRose21
Posts: 78
Registered: ‎10-31-2007

Re: USDA Success stories

I'll answer your questions in order

 

1) There are many banks that do USDA loans but Chase was one of the better ones. They had short turnaround with preapproval, underwriting, and do not wait to approve till there is more money for the guaranteed loan. EX. The lady at Chase stayed till 6:30 on New Year's Eve since we wanted to close on the 2nd of January.  They are amazing in my opinion.  They do unfortunately have a few extra fees for closing costs than some other ones.

2)  The new income charts are to come out in March 2009.   They will now have only two tiers (1-4 people) and (4-8) I believe.  This was to come out in January but with everything going on they have pushed it back. They do not do a waiver for income if it is above the income limit.  We wanted to move to a different county, but our current county's income limit was higher so we had to stay in our current county since we make too much for the other.  

3) There are other specific loans for teachers, firefighters,etc. They don't make exceptions. This is what we were told.

Contributor
BSBRose21
Posts: 78
Registered: ‎10-31-2007

Re: USDA Success stories

The minimum score for USDA is 580 no matter what and this is with a waiver which is not easy to get.  620 is really what you want to try to get.  Also, the direct loan is completely done through USDA office and from what I've heard they are out of money.  You will have to wait, no matter what, till they have the money for the "direct" loan.  Also, the income limits are different. It is not 115% of median income, but 80%.. As for the amount you would be approved for it is a debt to income ratio of 29/41.  You can go higher with a waiver. We did and it was no big deal.  As for the car loan, if you can, you should wait till it is 10 months left then they do not add it in with your debt to income ratio.  As for loan officers, I had a great experience with a mortgage broker. He had a ton of options available. My mortgage broker had a meeting with me to look over my expenses, income, credit score, etc and then laid it out what I needed to do. When I walked in there the first day I had a 565 on one score so I had to get that up before we filled anything out.  After paying down cc I had a 660.  He was great and explained everything.  When you call broker's ask if they have done USDA loans in the past. I wouldn't recommend filling out an application till they agree to go over everything with you, but then again it may be their way to just see all your information. 
Established Contributor
CanDoAttitude
Posts: 878
Registered: ‎04-08-2008

Re: USDA Success stories

[ Edited ]

Thanks BSBRose!!!

 

That is AWESOME information. I'm sure everyone wil find it

very helpful.

 

One quick followup question re income limits:

 

I've also been told that as of March 2009 there will be only

two income tiers ---- one for 1-4 person households and another

for 5-8 person households. Do you know if the new FY2009 income

chart will be adjusted for inflation, or will they just carry over the

4-person and 8-person limits from FY2008? From what I understand,

normally USDA adjusts their income limits for inflation (3-4%/yr) but it

would be great if you could confirm/deny this for us.

 

Thanks again for the quick turnaround. BSBRose. Enjoy the day!!!!

 

CanDo

 

"The right attitude is everything" 

Message Edited by CanDoAttitude on 01-15-2009 12:59 PM
Contributor
BSBRose21
Posts: 78
Registered: ‎10-31-2007

Re: USDA Success stories

They will be using the same two tier income limits they proposed in 2008 to appear January 20,2009. The max for a one to four person family will be $70,750.  Please check with your state's rural development to confirm this. The only difference is that it will be introduced in March 2009 instead.
Established Contributor
CanDoAttitude
Posts: 878
Registered: ‎04-08-2008

Re: USDA Success stories

Thanks so much for getting back to me, BSBRose. :smileyhappy:

 

I was hoping that the USDA might index those new income levels

to inflation, but the 2-tier system is a tremendous improvement over

the old system. And in high cost areas like DC, Los Angeles, SF, etc

the income levels are a bit higher but that's to be expected. In DC, for

example, the 1-4 person limit is about $88,000. But you're right, though.

For the rest of the country it's $70,750 for 1-4 person households.

 

Thanks again for the info. Make it a great day!!!:smileyhappy:

 

CanDo

 

"The right attitude is everything"

Valued Contributor
WannaHouse
Posts: 1,080
Registered: ‎06-08-2008

Re: USDA Success stories

I don't have a success story yet, but I am also going USDA guaranteed loan. We are going through Chase. We just haven't found that perfect house yet. We are all pre-approved though, so it will just be a matter of making an offer in our range and we will be a success story! (I like to think positive!!)  :smileyhappy:

Kathy


We are finally homeowners!!

Closed May 5th-30 yr fixed at 5.25%.


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+