topic Re: USDA Guaranteed loan in Mortgage Loans

USDA Guaranteed loan

Anonymous — Wed, 11 Sep 2019 13:56:45 GMT

I'm needing a little advice on a USDA Guaranteed Loan. My SO and I recently met with a mortgage broker in our area (Cape Cod, MA) and were advised that we should do a little work to our credit. I, unfortunately, have a $1800 charge-off on my report from 2016 following CH7 BK discharge in 2014 (I know, I know.) I was advised that we won't know whether this will need to be paid off unless both of our scores are over 640. So, my middle mortgage score at the time of our meeting was a 629, SO at 638. Since then, SO is at a 649 and I am at a 639. We were advised to get limit increases on any and all credit cards to help boost our scores. I was able to increase one of my cards by $1700 which helped a little. We also took what we had in savings and paid down 2 credit cards with higher balances to decrease our utilization. So we've successfully raised our scores around 10 points in just over a month.

Anyways, a house that we really like just hit the market. It's everything that we are looking for...location, price, size. I'm thinking of contacting the broker again to see if there is anything that can be done. I've read a bit about manual underwriting but he hasn't really suggested that option. I'm looking for any insight on whether it seems possible with our current scores and my charge-off after BK. I've read the guidelines but I'm hoping to hear from someone who has gone through it! Thank you :-)

Re: USDA Guaranteed loan

NC_Mtg_Loaner — Thu, 12 Sep 2019 01:11:13 GMT

Definitely check with a trusted lender in your area that has experience with the USDA Guaranteed Loan program.

This isn't the best time of year though because the USDA typically closes the books on fiscal 2019 and needs Congress to pass the budget in order to begin funding loans for FY 2020. Not saying there's any reason to think Congress won't agree on a budget this year because they're all working so well together, (:rolleyes and :sarcasm) but just check with your trusted lender.

Some lenders don't stop funding during this time period and some do---you don't want to be "stuck" where you can't close until Congress appropriates funds for the FY 2020.

Re: USDA Guaranteed loan

homeloanexpert — Thu, 12 Sep 2019 10:37:16 GMT

I suggest you find a new lender. For example, my company doesn't require that any charged off account be paid off. In addition we go down to 580 on USDA RDL's which are Manual Underwritten loan files. I strongly suggest that look around for another lender.

Best of luck to you

Re: USDA Guaranteed loan

Anonymous — Sun, 15 Sep 2019 16:20:19 GMT

What state is your mortgage lending company? I’m looking in to USDA loan direct and guarantee in the state of Georgia and need an experienced lender to help me as well

Re: USDA Guaranteed loan

Anonymous — Sun, 15 Sep 2019 19:32:02 GMT

I too am looking for a USDA guaranteed loan in GA, let me know if you find a trusted lender

Re: USDA Guaranteed loan

VALoanMaster — Tue, 17 Sep 2019 15:39:27 GMT

@Anonymous wrote:
What state is your mortgage lending company? I’m looking in to USDA loan direct and guarantee in the state of Georgia and need an experienced lender to help me as well

A mortgage lender will not be able to help you with a USDA direct loan outside of pointing you to the local USDA office.

For the USDA guaranteed loan, I can do them in all 50 states & I have a lot of experience with them.

Re: USDA Guaranteed loan

VALoanMaster — Tue, 17 Sep 2019 16:40:38 GMT

@Anonymous wrote:
I'm needing a little advice on a USDA Guaranteed Loan. My SO and I recently met with a mortgage broker in our area (Cape Cod, MA) and were advised that we should do a little work to our credit. I, unfortunately, have a $1800 charge-off on my report from 2016 following CH7 BK discharge in 2014 (I know, I know.) I was advised that we won't know whether this will need to be paid off unless both of our scores are over 640. So, my middle mortgage score at the time of our meeting was a 629, SO at 638. Since then, SO is at a 649 and I am at a 639. We were advised to get limit increases on any and all credit cards to help boost our scores. I was able to increase one of my cards by $1700 which helped a little. We also took what we had in savings and paid down 2 credit cards with higher balances to decrease our utilization. So we've successfully raised our scores around 10 points in just over a month.

Anyways, a house that we really like just hit the market. It's everything that we are looking for...location, price, size. I'm thinking of contacting the broker again to see if there is anything that can be done. I've read a bit about manual underwriting but he hasn't really suggested that option. I'm looking for any insight on whether it seems possible with our current scores and my charge-off after BK. I've read the guidelines but I'm hoping to hear from someone who has gone through it! Thank you :-)

Hi Capewaves114,

Did your broker tell you why they wanted you to get your scores up to 640?

The USDA automated underwriting system (GUS) will not approve a loan with a score under 640 which means it has to be manually underwritten. A lot of lenders will not do manual underwrites on USDA so they set their minimum credit score requirement to 640 or better.

This brings up the main issue in my opinion.

If your file has to be manually underwritten, it's than likely going to get denied because you had a charge off after a bankruptcy.

Unfortunately most underwriters deem any derogatory hits after a bk as a huge red flag. They may overlook it if you have a really strong letter of explanation.

There are 2 possible options.

1) Try to get an approval through GUS.

2) Have an underwriter review your file upfront to see if they think it will fly as a manual.

The down side to working with a broker is #2 is pretty much impossible but it's something I do all the time.

Re: USDA Guaranteed loan

ldkcivilservant — Tue, 17 Sep 2019 17:22:30 GMT

I'm working with American Financial Network here in GA on a GL and it's going smoothly right now. The 'approved lender' list avaliable on the USDA website is not accurate at all - a good number of banks actually offer the program.

Re: USDA Guaranteed loan

Anonymous — Sun, 17 Nov 2019 02:21:46 GMT

Just wanted to provide a little update as I haven’t been on this thread since I started it. Last Friday I paid for a 3B report update and saw that my middle mortgage score was at a 647!
We got pre approved on Tuesday and put an offer in on a house that we viewed prior to the pre approval. Our LO is sending our file to the lender this Monday or Tuesday. Fingers tightly crossed that all goes smoothly!!!

Re: USDA Guaranteed loan

Hut1 — Sun, 17 Nov 2019 02:27:02 GMT

@Anonymous wrote:
Just wanted to provide a little update as I haven’t been on this thread since I started it. Last Friday I paid for a 3B report update and saw that my middle mortgage score was at a 647!
We got pre approved on Tuesday and put an offer in on a house that we viewed prior to the pre approval. Our LO is sending our file to the lender this Monday or Tuesday. Fingers tightly crossed that all goes smoothly!!!

Fingers crossed for you! 🤞

Re: USDA Guaranteed loan

Anonymous — Sat, 07 Dec 2019 22:49:43 GMT

Hello ! So we are going through the process with a home. I have recently found out a new collection is on my account from August I have above 640 my husband does not. So we are going though underwriting. Does this mean our loan is at risk because of this new collection ? I see you said they could ask you to write a letter? Is this in all cases ? I have read on the USDA manual of its under $2k they can ask you for letter of explanation. That they don’t reach to pay it off because it can take away from funding for closing costs ? Do you think we’re at risk ??

Re: USDA Guaranteed loan

Anonymous — Sun, 08 Dec 2019 02:36:49 GMT

hello there,

what is the qualifying debt to income ratios with USDA products? and in addition to this, down payment requirements if you get approved with lower score such as 580 range through manual underwriting?

Re: USDA Guaranteed loan

Anonymous — Sun, 08 Dec 2019 15:08:45 GMT

The DTI from my understanding is 41%
I know there are instanced you can get approved it just requires more tedious underwriting. It is also as the hands of the lender you chose. Such as some lenders will decline you if you don’t have a 640 which is required to be approved through the automatic underwriting system (GUS).

Re: USDA Guaranteed loan

Anonymous — Tue, 17 Dec 2019 21:04:38 GMT

Our loan was approved with conditions last week. We returned everything within 24 hours (yay!). Now, I think I’ve signed a request for tax transcript three times now. Today, I signed off on a request for my transcript yet again but this time with the transcript being mailed to a company called Fraud Technology? My co-applicant didn’t have to sign one but I did. Is this normal...?

Re: USDA Guaranteed loan

Anonymous — Mon, 18 May 2020 02:30:40 GMT

Do you work with USDA mortgages in DE ? Or NJ ?

Re: USDA Guaranteed loan

VALoanMaster — Mon, 18 May 2020 13:22:39 GMT

@Anonymous wrote:
Do you work with USDA mortgages in DE ? Or NJ ?

@Anonymous ,

Yes I do.

Re: USDA Guaranteed loan

Anonymous — Mon, 18 May 2020 13:51:58 GMT

How do we talk to you ? 😩 every lender I've spoken to about USDA they say they do it but they sound so uncertain about it LOL.

Re: USDA Guaranteed loan

VALoanMaster — Mon, 18 May 2020 15:29:06 GMT

@Anonymous wrote:
How do we talk to you ? 😩 every lender I've spoken to about USDA they say they do it but they sound so uncertain about it LOL.

Hi @Anonymous ,

I replied to your pm.