First of all, I'd like to say thank you to everyone in this communitiy. You are all so helpful and have answered a lot of my questions.
I'm a full-time government employee; my spouse does not work currently.
I applied for prequalification for USDA Direct Home Loan in January. Credit inquiry a couple days later, and then one of the specialist called me and said that I seemed like a good candidate and was pre-qualified for up to $180,000 (or so). She did mention that I had two accounts that may need explaination. One was an old debt that had already been paid and another collection agency was trying to squeeze more out of me. The other is an old store credit card from 2009 (last activitiy was 2011) - she advised me to consult with a credit counselor. She also sent me the application packet to fill out and submit.
Spoke with a credit counselor I've worked with before via email and she advised that there wasn't any way to know in advance if paying it would be helpful. Paying it could reflect well and bring my score up or it could "re-age" the debt and further harm it. She also said that the older a debt is, the less bearing it has on your report. I previously had two other store cards and a few medical collections accounts, but those were all paid off last year or in 2014. Everything else (college loan, car loan, bank credit card) have been paid on time continuously. So I wrote a letter of explaination for the store charge account, citing the advice of the credit counselor and saying I'd pay it off if advised by the loan officer, etc.
Filled out everything and sent the app, pay stubs, last year's tax return, copy of driver's license, work verification, and all statements to the Area Technician (by this point, we had changed our mind about what county we wanted to buy it, but the rates and income limits are the same) on Feb 1 via email. Wasn't sure when they needed the check or who to make it out to, so I did not include that (kicking myself now).
I proactively took the Homebuyer's class online and sent her the certificate on Feb 9.
Still didn't hear a word back (I at least wanted to make sure she had received it all), so I emailed her on Feb 18 asking if there was anything else she needed from me in the meantime, and casually asking about how long the approval process takes. She replied "We are running behind in loan processing due to the volume of applications being received. As soon as we are able to process you will be notified of any additional information that is needed." Which pretty much sounds like what I've heard about the program. I'm impatient, but this really does seem like the best loan for me.
Hoping I hear back any day! Will update if/when I get any news.
Please feel free to give me any advice or to share your experience.
Thanks again!
03-09-2016 - UPDATE***
The woman from the USDA office contacted me Monday to let me know that my application had been selected for processing and she included the letter and document requests as an attachment. It did list that I had credit issues and asked me to address the old store credit card ($473 balance), so I re-did my letter of explanation, stressing that I would be happy to pay off the debt as a condition of the loan if specified (see above credit counselor advice).
They also needed my spouse's date of birth and social security number (not a co-applicant) and his signature on the credit release form.
I had also forgotten to sign two papers in my original application.
Other than that, they just wanted updated bank and credit card statements. I gathered all of that together yesterday and am FedEx-ing it off to her today.
I guess the wait to hear back wasn't that long - about 36 days total.
A month seems like an especially quick turnaround, considering what I've read about other's experiences and the fact that she said they were behind in processing applications due to large volume.
Hoping the application gets processed quickly!
I do have two questions:
(1) It says that I have 30 days to respond to the letter (which I definitely am/will) - but does USDA have a similar timeline in which to process the application? Do they have to get back to me within 30 days?
(2) Should we start looking at houses (as in, tours) and get a realtor now or wait until we have the approval?
***3/18 Update***
My boss received the employment verification paper today - he emailed a copy to the USDA office, but mailed it as well.
Today on my drive home, I got an alert from Transunion that my credit had been pulled.
We're getting close! (Hopefully - have heard some ridiculously frustrating stories up here)
Hoping to hear back Monday.
