05-14-2010 07:05 AM
I just sent off our USDA direct loan application here in Oregon about two weeks ago. No word yet, but I hear it takes a month or more.
Here's the scoop:
Annual income from disability: 11,148 (929.00 per month)
Food stamp supplement: 1,428 annually (119.00 per month)
Combined SSi and FS: $12,576
No credit cards
No car payment
4 outstanding medical bills totaling about $400 (left over from before Medicare kicked in)
I do not know the credit scores. Last I heard his was over 700.
My info -
Unemployed college student
Graduating this June with AAS in the health services field
Receive grants and loans. Loans total about 11,000.
All loans are in good standing and are defered until January 2011
I also have unpaid medical bills totaling more than 5,000.
Backup plan: If not working by end of summer will return to college to continue education. Loans will then be defered until 2013-14.
If I do find employment, then yay!
No credit cards
No other loans
No idea what my credit score is. I showed 4 negatives (med bills) and 6 possitives (student loans) on Experion report.
Rent: $510 (always gets paid first and have not been late for more than 5 years. Yes, we live on a very tight budget in a very small and old apartment.)
History: Home and car repossessed more than 10 years ago when husband first became unable to work (multiple surgeries and it took 4 years to get him on SSI. A "riches to rags" story.) 2 low limit credit cards that didn't get paid off back then. I believe the worst of it has fallen off the credit report by now. Not sure if these would have any effect on us anymore.
The loan: If I understand it correctly, the USDA 502 Direct loan bases your house payment on your income. They will supplement the loan if you don't make enough to meet certain guidelines. This would be a big improvement on our DTI which is around 49% with rent of $510.
The houses available in rural areas near where we are, that we have been looking at, run 130,000 - 140, 0000. We just need around 1,000 sqft 1-2 bedroom single story. Granted we could go with a manufactured home, but in a park the site rent can get quite spendy and end up more than the house payment.
Question 1: In your opinion, would we have a chance at qualifying?
Question 2: Are we going to get anywhere near the 130,000+ mark?
05-15-2010 04:48 AM
I don't know much about the payment subsidy and couldn't find anything either. I'll be interested to see what the experts have to say on that. I just wanted to give a heads up that it will probably be easier to leave you off the loan when you apply. I think that much in collections may be required to be paid off and if you won't be bringing income to the table it's not worth the hassle. If you do find a job and apply, be aware that the collections may require explanation or payment. I'm leary because that would be a lot of subsidizing on their part. I don't know if that's the intent of the program. Good luck!
05-15-2010 07:35 AM
Yes, since Oregon is not a community property state, I included in a letter I attached to the USDA Direct application, that if it made things more feasable, then to please disregard Applicant #2 (me) and just go with my husband's info. I agree, no need to make it more complicated than it needs to be.
The way it was explained to me in an email from the main USDA office for my state, "Your income information and your debt obligations are entered into the program which determines the amount of subsidy payments you may be eligible to receive from USDA. Should the amount you are eligible for be too low to purchase a safe modest home there are other programs you can apply for in conjunction with the Direct Rural Housing Loan. For instance you can apply for assistance from the HACSA or the Housing Authority in your county."
I did find a manufactured home in a community where you own the lot as well as the house for under 100k, but it stated you had to pay Homeowners Association fees every month. I know, too, that a manufactured home also has some rules attached to it being eligible for a USDA loan. The little apartment we are in now (and have been for 7 years) has developed some black mold problems. We had a section of the wall in the bathroom replaced finally by the landlords, but they said it was probably all in the walls. We also have old metal frame single pane windows that I have to clean with bleach every few months as the mold likes to form there, too. I have a feeling that since the weather has gotten warmer it may be the cause of my dizzyness, nausea, and respiratory issues. With the lack of room, mold, and other issues I just don't see this as "adequate housing" anymore.
If we can pull this off I will officially proclaim the USDA as miracle workers.