topic Re: USDA RURAL DEVELOPMENT in Mortgage Loans

USDA RURAL DEVELOPMENT

Anonymous — Tue, 06 May 2008 21:19:11 GMT

I need some advice. I live in Minnesota and have applied for a USDA Rural Development loan. I am a single mother with 2 children. I pre-qualified for $220k in February and then the underwriter pulled it because I had 3 collection accounts that were not closed on my credit report. I did send proof they were paid but, it took 3 more months of battling it out with the CA's before I was able to get 2 closed and 1 paid and removed.

I have been reading all of the posts out here and one of my questions is.............

Why isn't anybody going through the USDA?? Do they not know about it??

They have different loan options and they are nation wide.

The particular one I decided to go with qualifies me for the $220k at a 4% interest rate and a gov. sub. that will keep my payment around 6-700 and month (tax and insurance included).

Not everyone wants the gov. sub. since the catch is................if you sell you pay that back. Basically loose your equity. Keeps house flippers away from these loan programs.

But, for a family of 3 I would need to make more than 60-80K a year to not qualify for this particular loan.

You have to jump through a bunch of hoops but, it doesn't sound like they are anything more than what people are doing for FHA.

If you're interested google your state - USDA Rural Development

If anyone has done this or knows a good reason why I shouldn't please let me know.

Thanks.

Re: USDA RURAL DEVELOPMENT

Anonymous — Wed, 07 May 2008 02:20:08 GMT

We have received the OK from the lender. I'm waiting on the USDA office to approve....submitted friday...should be back tomorrow or Thursday.

We're in MN also. We're fixed at 6% 30 years. 630 mid score. Have some old baddies 4+ years old. Only 2 baddies totaling $950 unpaid, lender doesn't require them to be paid. We could close as soon as Friday.... crossing my fingers...

The house is a gem. Forclosure 7 years old. 3 br 2 bath. basement is unfinished but has a toilet and tub for a third bathroom in the basement (plumbed already) and with some sweat equity and 5k in supplies we can have a 4 br 3 bath and a huge family room. Comparable houses would put us at about 45-50k in equity...it would take a lot of work...but I've done it before...and now I have motivation to finish it.

Any reason to not do USDA? Just the 2% funding fee for PMI. FHA requires monthly payments but USDA is just upfront and can be rolled into the loan. So I think USDA is better in that regards...I didn't know about it until I came here....found out about FHA and went to the FHA broker in town...he also does USDA so I listened to what it was all about and decided to go for it. I think people don't use it that much because they go to brokers....don't understand that other brokers have options for them, and either settle for some lesser option or give up.

Only other reason I can think is that it's Rural...and so I don't think every location qualifies...but it's definately worth looking into.

I can't blame a broker for not suggesting someone goes to a different broker...it's bad to turn away business...

People just don't know. I preach it to whoever will listen.

Re: USDA RURAL DEVELOPMENT

danev2 — Wed, 07 May 2008 03:10:26 GMT

I looked into the rural development thing. out here in the middle of the flippin desert and they don't do it here.
Only a few counties out on the fringes of the state.
the rural dev loan is more for the midwest and farm areas like yours

Congrats on your new house.

DV

Re: USDA RURAL DEVELOPMENT

ShanetheMortgageMan — Tue, 20 May 2008 02:08:40 GMT

danev2 wrote:
I looked into the rural development thing. out here in the middle of the flippin desert and they don't do it here.
Only a few counties out on the fringes of the state.
the rural dev loan is more for the midwest and farm areas like yours

It all depends where in the desert you are buying... if it's a city in the middle of the desert, such as Palmdale or Lancaster, that's a no go, as USDA loans aren't for buying in cities. If you are buying in Acton or Baker, those aren't considered full blown cities and would suffice for the property eligibility portion of USDA.

Re: USDA RURAL DEVELOPMENT

ShanetheMortgageMan — Tue, 20 May 2008 02:11:11 GMT

dork wrote:
Why isn't anybody going through the USDA?? Do they not know about it??

Going Direct to USDA has more strict eligibility requirements regarding income than the Guaranteed version of USDA (where you go through a lender)... plus, as you've experienced, if you take advantage of the subsidies then there are some additional requirements one must meet. For someone in your situation it sounds like the perfect loan, as it appears you are where you are going to be for the majortity of your remaining life... but for new professionals or new families which are planning for career advancement/change in income, the Guaranteed version of the program would be better suited.

Re: USDA RURAL DEVELOPMENT

Anonymous — Sat, 24 May 2008 16:21:12 GMT

@Anonymous wrote:
I need some advice. I live in Minnesota and have applied for a USDA Rural Development loan. I am a single mother with 2 children. I pre-qualified for $220k in February and then the underwriter pulled it because I had 3 collection accounts that were not closed on my credit report. I did send proof they were paid but, it took 3 more months of battling it out with the CA's before I was able to get 2 closed and 1 paid and removed.
I have been reading all of the posts out here and one of my questions is.............
Why isn't anybody going through the USDA?? Do they not know about it??
They have different loan options and they are nation wide.
The particular one I decided to go with qualifies me for the $220k at a 4% interest rate and a gov. sub. that will keep my payment around 6-700 and month (tax and insurance included).
Not everyone wants the gov. sub. since the catch is................if you sell you pay that back. Basically loose your equity. Keeps house flippers away from these loan programs.
But, for a family of 3 I would need to make more than 60-80K a year to not qualify for this particular loan.
You have to jump through a bunch of hoops but, it doesn't sound like they are anything more than what people are doing for FHA.
If you're interested google your state - USDA Rural Development
If anyone has done this or knows a good reason why I shouldn't please let me know.
Thanks.

We checked into USDA before we were approved for FHA, they said my husband made too much. This is for the state of Arkansas, every state might be different.

Re: USDA RURAL DEVELOPMENT

Anonymous — Mon, 30 Jun 2008 16:01:09 GMT

hello, can anyone tell me what the credit requirements/guidelines are for USDA rural develp.? i can't seem to find it anywhere. called the local office...no answer...go figure....i'm very interested in any information/input...thanks

Re: USDA RURAL DEVELOPMENT

Anonymous — Thu, 03 Jul 2008 20:24:18 GMT

http://www.rurdev.usda.gov/ca/offices/index.htm,

This is the link for California, but you can search for individual States. Good luck and hope the property that you're looking at is USDA eligible.

Re: USDA RURAL DEVELOPMENT

Anonymous — Thu, 17 Jul 2008 16:06:01 GMT

USDA have updated their income eligibility this month. Check your specific state for details. Has someone got approved with a score below 620 for this type of loan?

Re: USDA RURAL DEVELOPMENT

phumanr — Thu, 17 Jul 2008 16:33:50 GMT

Does anyone know if they have bankruptcy and/or foreclosure restrictions on lending?

Thanks,

Phumanr

Re: USDA RURAL DEVELOPMENT

Anonymous — Thu, 17 Jul 2008 17:01:36 GMT

I found this on the same link: http://www.rurdev.usda.gov/CA/pdf%20files%20and%20documents/GRH%20UNDERWRITING%20GUIDEL.pdf

Very helpful.

Re: USDA RURAL DEVELOPMENT

ShanetheMortgageMan — Thu, 17 Jul 2008 23:33:13 GMT

workmywayup wrote:
USDA have updated their income eligibility this month. Check your specific state for details. Has someone got approved with a score below 620 for this type of loan?

I remember reading about a week ago someone here got approved with a 619 mid score.

Re: USDA RURAL DEVELOPMENT

phumanr — Sat, 19 Jul 2008 13:39:57 GMT

It appears in my situation, with a BK of 4 years and a foreclosure at 2.5 years, USDA can do a streamline approval process above 620....my middle score is 703. The link was very helpful. Does anyone interpret anything differently?

Phumanr

Re: USDA RURAL DEVELOPMENT

ShanetheMortgageMan — Sat, 19 Jul 2008 19:29:23 GMT

phumanr wrote:
It appears in my situation, with a BK of 4 years and a foreclosure at 2.5 years, USDA can do a streamline approval process above 620....my middle score is 703. The link was very helpful. Does anyone interpret anything differently?

Phumanr

You should have a good shot due to the high credit scores. Congrats getting that good of a score with a foreclosure so recent. Put in your application, should only take a week or thereabouts to hear back on the approval.

Re: USDA RURAL DEVELOPMENT

phumanr — Sun, 20 Jul 2008 14:24:39 GMT

All,

One other quick one -- on eligibility requirements for income..for 1 person it listed about $35K...is this a minimum requirement or maximum requirement for this loan?

Thanks,

Phumanr

Re: USDA RURAL DEVELOPMENT

ShanetheMortgageMan — Wed, 23 Jul 2008 18:28:45 GMT

phumanr wrote:
All,

One other quick one -- on eligibility requirements for income..for 1 person it listed about $35K...is this a minimum requirement or maximum requirement for this loan?

Thanks,
Phumanr

Yes there is a maximum threshold that you must be under, and it increases for every family member you have living in the home. You can find location requirements & income requirements at http://eligibility.sc.egov.usda.gov/eligibility/eligibilityAction.do by clicking on the links along the left side of the webpage.

Re: USDA RURAL DEVELOPMENT

Anonymous — Fri, 17 Apr 2009 00:30:20 GMT

is a dti ratio of 37-38% high for a rural development direct loan? i have a credit score of 653... help please!!!

Re: USDA RURAL DEVELOPMENT

Anonymous — Fri, 17 Apr 2009 15:11:51 GMT

Is that what it is with, or without the mortgage? Your credit is good so they will stretch some on the backend ratio if needed. Talk to a lender.

Re: USDA RURAL DEVELOPMENT

Anonymous — Sat, 18 Apr 2009 20:30:03 GMT

its without the mortgage.

Re: USDA RURAL DEVELOPMENT

WannaHouse — Sun, 19 Apr 2009 04:23:13 GMT

I think that may be a tad high. Mine is 34% and it was a bit high. Nothing was said because we are both over 660 now.