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I must be really confused. I thought that if you are going through the USDA for a Direct loan that the USDA was the lender. I have had 2 people tell me that I can use a lender outside of the USDA to process my loan. One was a co-worker who is going through the process and the other was a sales person from a local builder in my area.
Is the lender not the person who loans you money on the home? The sales agent said that if I used their lender that they would pay closing costs and that they could get the loan approved faster. I really need to use the USDA Direct Loan due to income and the subsidy that it offers. If allowing another lender to process the loan is allowed how would I go about it since I have turned in my application yesterday
I also thought that most lenders required a minimum score of 640. The USDA told me that they could go lower than that. I was about 20 points short on mortgage scores a few weeks ago. I have since paid off some stuff and paid my credit cards down to a $25 balance and gained about 30 points. I hope it was enough to raise my mortgage scores.
I would really appreciate the help if someone can clarify this for me. I don't want to do anything to mess things up or get things confused.
The typical confusion arises from the fact that there are two USDA loans:
Single Family Housing Direct Home Loans - funded by USDA
Single Family Housing Guaranteed Loan Program - funded by USDA approved lender
As far as I know, the Direct loan can only be processed by USDA. Both loan programs are referred to as a USDA Loan. In my experience, most people don't know about the Direct program, so even if you call it a "USDA Direct Loan" they are probably thinking about the other USDA loan. That's my guess.
That makes sense and that was also my understanding when reading about the Direct loan process. Thanks for answering my question.
onstar has the answer.
thanks