I was reading on here that mortgage scores van vary wildly from Fico 8s so over the weekend, I paid $5 for my ex - 650. Then I got a letter from Navy with my mortgage scores EQ 671 and EX 650. They said TU said I didn't have enough credit history to give one (**bleep** ?). I will have to double check and make sure TU is not frozen.
My Navy loan officer sent me an email asking when was a good time to call. I answered back so now I'm still waiting on that call.
USDA and I aren't going to get along, I see. I have heard nothing about my prequal app and I called Monday and left a voicemail asking if it was received and or complete.
This old house I'm renting has ac problems. The air went out 2 weeks ago and it took 8 days for it to be patched by the landlord. Today it went out again. The temp inside got up to 90 degrees. My dogs were following me, panting and distressed. I came out of pocket to pay a handyman a friend recommended. He was able to get it back on but it's still in the low 80s in here. We have ceiling fans and tower fans going as well. The Georgia heat is no joke.
Bad news, guys. I called USDA today and I got the voicemail again. This time I was directed to call another number if I was calling for a loan. I called that number and left a message. The guy called me back and said I did not qualify because my bankruptcy is not 3 years old. It has to be 3 years old. He said also my DTI is high at 43% and needs to be below 41%.
So I'm a little sad. He calculated my income at $18k per year. I could see if I qualify for the other USDA loan and he recommended Homestar as the lender. And of course, I'm still waiting to hear from Navy.
So more bad news but a I got a lot of good education so that was priceless. I had a long talk with my Navy person yesterday and here is what she told me regarding my FHA loan app:
They cannot approve an app without showing the 3.5% doown payment already in the bank. I could use a gift letter but the money has to be in that person's bank, too. I don't plan to ask anyone to do that, it's just something she mentioned.
They do not accept down payment assistance program funds for the down payment unless the program gives me a check and I deposit it. She said regardless, don't turn down free money.
She calculated that future mortgage payment plus current debt must be less than 55%. Remember I asked for a 150k loan, figuring they would tell me how much I could afford and what changes I need to make ? Yeah, it doesn't work like that. I need to figure it out for myself a little bit. So right now the mortgage for a 150k house plus my debt is >100% !!!
The way she calculated my debt is by checking my credit report and adding up all my minimum payments. I keep a spreadsheet of monthly payments so I went through each debt and set them to add up and give me that total number on a separate line.
She recommended I find a local lender because she said they can do magic with FHA loans.
She also recommended I prepare a year to date earnings statement and I am definitely going to do that.
So here's my plan:
Work on lowering monthly payments and stop using my cards. The easiest thing to do is pay off Target, Walmart & Overstock right away and sock drawer them.
Go to as many down payment assistance classes and the FHA homeowner class asap.
Re-evaluate monthly to see where I stand before reapplying.
Pick up some extra work to help speed up paying down balances. This won't be hard to do.
Consider waiting until 1/21/19 to apply for the USDA loan.
I'm going to buy a house.
After doing some extra reading in this forum, I have come upon a new wrinkle. Student loans. I just consolidated my student loans with Great Lakes. I signed up for the Income Based plan which is called repaye. Based on my income, I would pay $0 per month for the next year and then next year I would have to submit my earnings to see what my calculated payment is. After 25 years on this plan, my loans would be forgiven.
The problem is FHA will not accept $0 as part of my dti. They will use 1% of the loan balance as my monthly payment, which for me is $800 !! There goes my mortgage payment !
So my other option is to seek a conventional loan like Fannie Mae. Freddie Mac is out because they also calculate student loans at 1% if your actual payment is $0.
Here's the rub - Fannie Mae requires you to be 4 years out of bankrupcty. I'm only 2 1/2. I did read that if you have extenuating circumstances, they may proceed. The year I filed, I had 2 surgeries (one was minor but due to a debilitating condition but the minor surgery did not heal me and I required major surgery after that so that actually healed me). So my hope is that underwriting will say that falls within their guidelines.
In the meantime, I have to check with USDA Direct to see how they treat IBR $0 student loans. The USDA Guaranteed loan will do the 1% thing.
I also wonder if it matters to FHA if the studet loan is not reporting on the credit report or if they use some database to look up student loans. A loan officer I spoke to could not answer this. Of course, if I went through the loan process and all of a sudden my student loans popped up on my reports, I would have done a lot of work for nothing so that would be a huge risk.
My state has a program called Georgia Dream. I'm trying to figure out just what is the benefit to this program. It is absolutely unclear.
I have yet to sign up for the homeownership programs and down payment classes. That needs to be a priority this week.
Today has been research day for me. 
So in my mind, USDA Direct is the best option for me. But remember the USDA guy said I have to wait the full 3 years post bk which would be January 2019 ?
And yet I dug up a thread here from 2011 that detailed the poster's USDA process. It was mentioned in there to read the USDA guidelines which are posted on their website so as a consumer, I know the rules, too. The extenuating circumstances was mentioned again. I knew this applied to the USDA Guaranteed Loan but I wasn't sure about USDA Direct.
I went to Chapter 4 of the guidelines and it says:
An applicant with significant delinquency on the credit report, even with a reliable credit score of 640 or higher, will be subject to further credit analysis and Form RD 1944-61 must be completed. Significant delinquency includes the following:
• A foreclosure, deed-in-lieu of foreclosure, short sale, or mortgage charge-off that has been completed within the last 36 months.
• A Chapter 7 bankruptcy discharged less than 36 months prior to the application date.
Then I looked for Form RD 1944-61 and it says:
Section C - Bankruptcies, Foreclosures or Debt Settlement Bankruptcies - Date of last occurrence
Were circumstances beyond the applicant's control? (If yes, give a brief explanation.)
So it's not an absolute NO. An explanation can be given. Which gives me great hope.
Now back to reducing my monthly debt.
So I just spoke with USDA guy. He still wanted to insist that I be out of bankruptcy 3 years. Then I read the guidelines to him. So he said, we'll look at the whole package ma'am.
Thank the lord my profile is perfect since bk. Thank the lord for myfico !
My next qestion to him is how do they handle income based student loan repayment plans. He said, whatever you pay, is what we use. So zero it is !
My next question is do you include food stamps as income ? He said yes ! That bumps up my income a little. Who would have thought ? I know I read that in myfico somewhere.
My last question was what is their debt to income ratios. 29/41. He said they are mostly concerned that dti is under 41. Working on it !
Goals for this month:
Reducing monthly debt.
Attending a homeowner class.
Looking into down payment assistance classes.
What is Georgia Dream ?
@Anonymous wrote:I would suggest while waiting for the Bankruptcy to reach 3 years, to put any available fund into a high interest account with Navy to help save up for a down payment. Or to help with any fees that may arise.
Good Luck!
Hi, I'm not waiting for the bk to age. But I will wait until my dti is much lower. And USDA direct is a no down payment loan. However, I plan to have a couple of months of mortgage shock money.
So, here's a sad little update. I've reduced my dti significantly. But, Great Lakes reported my student loans (paying on time) but my balance is $83k which tanked my scores by 30 points across the 3 agencies. My TU is 644 but my EX is 638 and EQ is 628. If I only get my EX up 2 points, I would go ahead and see if I can get prequalified for USDA Direct.
I'm not sure what to do to make it budge. My Discover cli posted and it did nothing for my scores.
I've been taking on extra work to help with my goals.
So here's my goals for this month:
Pray for an EX boost so I can submit my USDA pre-app.
Attend a first time home buyer's course.
Find out the purpose of Georgia Dream.
Keep paying down debt. Goal is all but one is zero.