USDA Direct Loan Process
02-26-2012 09:11 AM
Hello everyone! I wanted to share my loan process so far.
This has been such a long process my dates may be off inthe beginning but I can give estimates.
Submitted preapproval in September. Received a phone call first notifying my that the complete package would be sent for me to fill out and return. I submitted everything and anything I could think of, including a LOE for a judgment I was making monthly payments on. I sent this in the middle of October.
I received my certificate of eligibility in the middle of December and started shopping right away.
It took almost a month of going back and forth to reach an amicable purchase offer on a property that had everything I was looking for. The price was originally listed at $120k. They lowered it to $99.9. We settled on $87 with $4k in closing costs from seller. They wanted an addendum that they would not make any or pay for any repairs. I agreed since the house seemed to be in great shape, plus the contract stated anything over $500 I was allowed to walk away from the deal if I so choose. I also submitted $500 for good faith payment.
Sent in the paperwork to USDA the end of January. Received my GFE February 2nd.
Immediately scheduled the inspection for January 31st. A friend did this for $300. I received the report a few days later with some minor repairs that would need to be made.
I got many quotes and finally settled on an insurance agent and sent the quote to my underwriter.
My underwriter contacted me the second week in February saying that because the square footage was above the normal 2,000 by 112 feet they would need to determine if I could afford the utilities. I had already gotten a monthly average from the utility company verbally but USDA wanted 12 months worth of bills. After a week of going back and forth, and research on my part, it was determined that they are only supposed to count living space. The finished basement is not considered living space therefore I was in the clear.
USDA did their walk through 2/7. An appraisal was ordered and completed 2/17. I have no idea yet what it appraised at. I received my funding commitment dated 2/24 with a list of contigencies. They were able to set aside $2,400 for the repairs if I choose to finance them so I need to get 2 estimates for the repairs. I don't believe they will cost that much. They consist of loose outlets, a rubber boot is needed a pipe on the roof, some shingles needed to be nailed down, one piece of siding needs to be sealed and nailed in, the flue pipe on the hot water tank needs to be replaced, electrical tape around something on the furnace, a stair railing secured better, and some electrical outlets outside under the addition needs to be repaired. I also need to order a pest/termite inspection. If I had know this was to be required it would already be done. Grr. I need to choose a title agent. I need to submit proof that the judgment was paid off (recently). Still waiting for the seller to submit the survey, the contract states they are responsible for it. And I need to send in a month's worth of paystubs as well as sign some paperwork (funding commitment and attachment to GFE). The GFE lists things that I have already paid for or will need to pay for out of my pocket, i.e. inspection and insurance. It does not include attorney fees or real estate agents commission or my good faith deposit. But so far it is around $4k. They have estimated that I will need $50 at closing.
When I first received that letter I was overwhelmed. But I have since calmed down and made the list and it really isn't that bad. I am still shooting for a closing date no later than the end of March.
I knew this was going to be a long process and I thought I was prepared. This board helped tremendously. But there were still surprises that I had not anticipated (mainly how long the process takes). It is still worth the wait and headaches and work, so far :-)