Can You Use A Lender To Process A USDA Direct Loan?

[Anonymous]

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.

[onstar]

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.

[Anonymous]

That makes sense and that was also my understanding when reading about the Direct loan process.  Thanks for answering my question.

[DallasLoanGuy]

onstar has the answer.

thanks