The difference as I understand it is income. The direct can get you a lower interest rate as well as a government subsidy. However, if you go to sell within a few years you are not going to get the equity you may have put into the home since you will be required to pay back the subsidy portion of the loan. This keeps house flippers out of the loan program for profit reasons.
From the mortgage brokers and officers and classes I have taken this has been stressed over and over again to be the best program to use if you can get approved.
There aren't any hoops I have jumped through that I wouldn't have had to go through in any other situation as well.
But, you need to have a credit score of 640 or better for Minnesota anyway. And it sounds like there may be a little give here but, not much.
All of my collections had to be paid and or a satisfactory payment agreement set up and closed for 6 months or more from my credit reports.
You have to take a homestretch class before you close. Highly recommended.
They will pull all three credit reports....small fee. Divorce decree, child support for the past year, rent verification from landlord, bank statements, all loans, revolving credit etc....
The property usually needs to be located in a rural area........20,000 pop. or less. They have a property eligibility plug on their web site. It needs to appraise at or for less than their max dollar amount for the loan.
That's all I can think of for now. Good luck.
