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Contributor
1fastZ
Posts: 76
Registered: ‎03-26-2009

USDA loans with New Construction- What a Crock of sh#!

Just found out that after putting money down on land, and money spent on floor plan design, USDA Guarunteed does not cover your construction loan.  I did not find this info posted ANYWHERE on any USDA gov't site.  It is the buyers responsiblity to cover the construction loan.  So I ask, WTF is the purpose of 100% financing, and thier websites stating "Exisiting and New Contstruction"....???

 

Several banks are not even offering construction loans.  Several want 20%, the majority want 10%.  Well if I had 10%,  I would not even need a USDA loan!!!

 

Only USDA Direct will cover it.  And of course, the income guidelines for 1-4 persons is $38k....

 

Where is all this tax payer bail-out money going?

>>>EQ: 791__TU:757
Super Contributor
DallasLoanGuy
Posts: 6,097
Registered: ‎07-03-2007

Re: USDA loans with New Construction- What a Crock of sh#!

This is not a bailout loan.

It has been in place for a long time.

This is a loan to help folks in rural areas secure modest housing. It was never meant to replace the 100% financing that has long left the market.

 

 




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Senior Contributor
mickie08
Posts: 3,299
Registered: ‎04-22-2008

Re: USDA loans with New Construction- What a Crock of sh#!

did you do all of that prior to approaching a LO or after.  the Lo should have known that from the start if that is part of the program.  If you started the preparations hoping to get a USDA loan then it falls on you for not researching it.

 

Alot of programs like this do not do scratch built homes because they are a riskier loan and because it is somewhat looked at as a luxury to have a custom home buitl as opposed to just buying a home that is already their or os in an established subdivision being built. 

Contributor
1fastZ
Posts: 76
Registered: ‎03-26-2009

Re: USDA loans with New Construction- What a Crock of sh#!

I think half an acre and a 1600sq.ft. 4 corner home, no garage, no basement is modest.  Thanks for the sarcasm though....  It is rural, I meet income guidelines for guarunteed, and the location (W.V. if you're so inclined)

 

"This is a loan to help folks in rural areas secure modest housing. It was never meant to replace the 100% financing that has long left the market. "

 

So then explain to me then what exacty 100% financing means then?  Or 102% to be technically correct...  I mean what part of 100% financing am I missing here?

 

You mentioned nothing about disclosure regarding construction on their website....

 

 

mickie, what has me angry is I verified this info BEFORE I ever began looking at new construction with the local USDA branch office in Martinsburg, WV.  LO and USDA personel were very misinformed.

 

I am cautioning those whom are looking to build a new home with USDA Direct/Guarunteed....

>>>EQ: 791__TU:757
Senior Contributor
mickie08
Posts: 3,299
Registered: ‎04-22-2008

Re: USDA loans with New Construction- What a Crock of sh#!

that was my question.  I think you need to contact the LO and lender and see if they can do anything about it.  If they say no, then maybe you need to contact a lawyer and see if you have any options do to the money put in so far.

 

As far as Dallas goes, he was responding to your sarcastic comment on the bailout money.  there have been alot of people on these boards trying to use USDA loans because they are now about the only 100% financing out there even though what those people want and qualify for are way outside of the USDA standards.   And the USDA is a long established program that has nothing at all to do with stimulus dollars or bailout money.  Don't throw out sacrcasm without expecting some of it bcak a little... LOL. 

 

 

Contributor
1fastZ
Posts: 76
Registered: ‎03-26-2009

Re: USDA loans with New Construction- What a Crock of sh#!

[ Edited ]

Thanks mickie...

 

As I understand, USDA only insures the loan and does not fund it.  Banks that received bail-out funds are financing the loans....  right?  Or am I wrong...?

 

But yeah, I love all the passive aggressiveness that floats around here....:manwink:

Message Edited by 1fastZ on 08-19-2009 07:23 PM
>>>EQ: 791__TU:757
Senior Contributor
mickie08
Posts: 3,299
Registered: ‎04-22-2008

Re: USDA loans with New Construction- What a Crock of sh#!

That does not change the fact that they have to be funded via USDA guidelines or USDA will not insure them.

Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008

Re: USDA loans with New Construction- What a Crock of sh#!


1fastZ wrote:

Thanks mickie...

 

As I understand, USDA only insures the loan and does not fund it.  Banks that received bail-out funds are financing the loans....  right?  Or am I wrong...?

 

But yeah, I love all the passive aggressiveness that floats around here....:manwink:

Message Edited by 1fastZ on 08-19-2009 07:23 PM

 

fast - I'm not trying to take any sides.  But as one who read your post, it very much came across as hostile, and accusing (suggestion of connection to bail out money).

 

Generally on the boards you often get back what you put in.  While you may have experienced passive aggressive, in your opinion, this was after your not so passive aggressive beginnings.

 

As a word of advice when seeking info.  Ask the question, seek the info and leave the emotion at home.  I am not being sarcastic nor am I finger pointing.  I'm attempting to communicate a potentially more effective means of communication and acquisition of information.

 

Dallas is a very polite and highly informed loan/mortgage individual.  You would do well to be on polite terms with him if you seek mortgage and loan info.  I read his posts and replies on a regular basis and can attest that he is quite easy to deal with when the introductory post is modestly tempered and on point rather than on rant.

 

 

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Posts: 16,253
Registered: ‎03-12-2007

Re: USDA loans with New Construction- What a Crock of sh#!

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granny031350
Posts: 951
Registered: ‎12-04-2007

Re: USDA loans with New Construction- What a Crock of sh#!

what USDA meant by "new construction" is that you can buy a brand new house already built.  I ran into a similar situation.   I wanted a newer home, not a fixer er upper.  And the only way it would work with construction was to have the  builder build the home and then you buy the house from him when it is done.  I had a builder willing to do this (big investment on his part) but I needed a letter of approval.  Well I had a letter of approval from USDA but was only approved for 110,000.   Well that doesn't build much house.  :smileysad:  

But my story has a happy ending because I found a brand new home already built (builder went bankrupt) and got that for 105,000.   It was a steal and even though there is still some finishing to be done (house was all done just needed some things like toe kick in the kitchen  and vanity mirrors, towel bars stuff like that) 

 

The builder told me he could not even begin to build me a home for 110,000 (like I wanted anyway)  so it all worked out.

 

No banks are doing construction loans at this time and those building with builders in developments, the builder is fronting the money (some pay like 5000 to get started) and then close the deal after the house is built.


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