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Clueless but I would like to buy a home - USDA Direct

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Established Contributor

Re: Clueless but I would like to buy a home

So today I got an alert that EQ Mortgage Services had done a hard pull. Then I got an email from my rep that I missed a few questions on 2 pages and he needed a copy of my divorce decree. I promptly sent everything in. He confirmed receipt via email.

 

Then I received a call from a realtor in the evening who is familiar with the Direct loan and the area I want to move to. She seemed pretty nice. She had good things to say about my rep's office and their processing speed. She said she would let them know she was going to help me find a house. It's a plus if she has a positive relationship with the USDA office. If things work out well, I will definitely recommend her. I found her company from a google search of realtors in that city and a 5 star rating in google.

 

In case anyone else is interested, she mentioned that she helped buyers with the GA Dream program. 

 

Meanwhile, I'm starting a spreadsheet of properties I'm interested in. I'm trying to get the max square footage and acreage for whatever money I am approved for. I'm limited to 2000 square feet for the house and 1 acre for the land. She was telling me that homes with the split foyer style have more space. Yikes ! I don't consider myself picky but I hate those homes you walk into and the stairs are right in your face. I definitely want a fireplace and a garage. And a big back yard for my dogs to run and play. Smiley Very Happy

BK7 Discharge 1/16
10/15 ~ EQ: 406; TU: 520
10/18 ~ EX: 666; TU: 646; EQ: 652
Message 41 of 110
Established Contributor

Re: Clueless but I would like to buy a home

So last week I got some bad news. The USDA rep called me and told me he could not approve my loan because my "income was too low". What ??? After all the conversations, number crunching, paycheck stub scanning ?? It just did not make sense. I took notes while he spoke and one thing that came back to me was he said my payment shock was 250%. I didn't know much about payment shock and what that meant, so I looked it up.

 

It turns out I can't be approved for a monthly payment greater than 250% of my current rent. That's really the problem. That would mean with taxes and everything, my mortgage payment can't be more than $397. And I think their minimum loan is $120k. 

 

So what does that mean, even for people who live at home and pay no rent ? How do they buy a house ? I emailed him that question and then I googled USDA and payment shock. Initially I found the guidelines that state payment shock does not have to disqualify someone if their credit score is 680.

 

But that was in the guaranteed loan guidelines. Actually, in the direct loan guidelines, it says:

 

In cases where payment shock is greater than 100 percent or could not be measured since the applicant does not currently have any housing expenses, no additional risk layering (i.e. adverse credit waivers, use of compensating factors, etc.) should be allowed without strong justification. Multiple layers of risk may be justified if the applicant has an excellent credit history reflecting timely repayment of credit obligations or a reliable credit score of 640 or higher on their TMCR.

 

So maybe I don't need to get to 680 (although I would love to) to continue with my loan app. We'll see what the rep says. The only other waiver I have is the bankruptcy.

BK7 Discharge 1/16
10/15 ~ EQ: 406; TU: 520
10/18 ~ EX: 666; TU: 646; EQ: 652
Message 42 of 110
Established Contributor

Re: Clueless but I would like to buy a home

Just dropping in for an uppdate. I never did hear back from the USDA Rep.

 

I started thinking, maybe I should have someone else look at my app. They do have people who are certified loan packagers. It costs a lot of money, but they help you by reviewing your Direct loan package and they submit it to the USDA on your behalf. It took me about a week to find one in my area. It seems like a well kept secret.

 

I sent the packager my loan app and he is reviewing it. He said the same thing the USDA guy said, "I've gotten worse approved." Is that something all loan guys say ?

 

I'm still hopeful. I went neighborhood reviewing today. I found a house for $129k that got me really excited in a nice neighborhood, close to the highway.

 

I'm still praying !

BK7 Discharge 1/16
10/15 ~ EQ: 406; TU: 520
10/18 ~ EX: 666; TU: 646; EQ: 652
Message 43 of 110
Established Contributor

Re: Clueless but I would like to buy a home

My loan package that was put together by the certified packager went to review at FAHE last Friday. It's a non-profit organization that helps people with their USDA Loan applications. The  FAHE rep said it would take her 5 days to review it beofre submitting it to USDA. So far I have not been asked for any additional information. The loan packager was super thorough. He asked me for all kinds of things the USDA office never asked for. So I'm guessing no news is good news. I will give her the full 5 days and then ask for an update on Monday. Oh and I switched USDA offices. So my app will go to a different office from the one that said no.

 

Meanwhile, I've been checking out neighborhoods. I looked at a new construction home today. Wow, the bedrooms were tiny. The main street was sad. This weekeend I'm going with a realtor to look inside some homes in nice neighborhoods. I'm excited about that. 

BK7 Discharge 1/16
10/15 ~ EQ: 406; TU: 520
10/18 ~ EX: 666; TU: 646; EQ: 652
Message 44 of 110
Established Contributor

Re: Clueless but I would like to buy a home

I heard from my packager last week that FAHE had questions. Specifically about my profits and losses and also my dti. So I told the packager I don't have any losses as I don't purchase inventory or anything like that. He wasn't real responsive so I sent a LOE just in case. Then on Saturday he asked about my dti again. Someone is bad with math. I hope he got it resolved because most of my favorite homes are now under contract. Now I am looking even further out. And further out, the new construction homes come with land. So I'm going out again tomorrow to see just how far out they are and what the nieghborhood looks like.

 

I'm praying I get my COE this week. 

 

I signed up for Navy RealtyTrac. They recommend realtors to you and if you close with them, you get some money back. Because I am looking adjacent to Atlanta in several counties, the realtors are only assigned to certain counties. They gave me 2. So the first one was very personable and gave me the impression she would do all areas. So I mistakenly told the other realtor the first one had it covered. The first one, let's call her V, would say let's plan to look at houses on Thursday. Then Thursday she told me she had out of town guests so next Friday would be better. And quite a few times she said she didn't have a lot of gas money to show me houses. The last straw was when I went to look at a house and she said that I should put an offer on it with a contingency (but I had not even seen the inside !) that the contract would depend on me getting my COE. Mind you, I have not seen the inside of any homes yet ! And I had an actual appointment to see some homes two days after that with Realtor A. V was real aggressive about putting a contract on a home I hadn't seen.

 

So after I saw 4 homes with A, I could see a huge difference between the two realtors. I contacted Navy and told them I wanted to see homes asap and V was just not showing me anything. So they gave me a new person in that area, T. Well, V started sending me emails with new listings. So I asked Navy if they had spoken to her. They said yes, and she should not be contacting me and to let them know if she contacted me again. Today I got another email and then she called me ! V said she wanted to just let me know there was no hard feelings and she wished me luck. Talk about crossing boundaries ! 

 

Now realtor A has disappeared. But T sends me daily listings. Most of them I have seen or they don't fit my criteria (fireplace, garage, back yard, no pool). I don'tmind looking myself because I know what I want. It's the waiting on other people to make that happen that is the hard part.

BK7 Discharge 1/16
10/15 ~ EQ: 406; TU: 520
10/18 ~ EX: 666; TU: 646; EQ: 652
Message 45 of 110
Established Contributor

Re: Clueless but I would like to buy a home

Hey, MFers ! Time for an update. Hope everyone had a lovely Thanksgiving. So, my packager found an account that wasn't on my credit report that adds to my dti significantly. USDA told me they only calculate accounts on my report. I couldn't win that argument with him. Then he counted food stamps and SNAP twice, not realizing it was the same thing. So my dti went up and my income went down. My home affordability went down about $20k. Since I've been looking at neighborhoods, I know I can't find anything nice in that price range.

 

The solution is for me to pay off 2 credit cards to reduce my dti. Then my affordability goes up to $154k and $174 for energy efficient.

 

It's going to take me no later than  3 weeks to pay off the two cards. He said we will submit a new app. I'm getting close ! 

BK7 Discharge 1/16
10/15 ~ EQ: 406; TU: 520
10/18 ~ EX: 666; TU: 646; EQ: 652
Message 46 of 110
Frequent Contributor

Re: Clueless but I would like to buy a home

Wow, this was like a soap opera, I've read all of your updated post and found myself quite disappointed once reaching the end. I was literally waiting on the post that said "yay I got approved". Man this is a good read, good luck with it all. I plan to purchase a home within the next 2 years so i've learned a lot from reading your post about this situation. I'm rooting for you and following, again good luck

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Message 47 of 110
Established Contributor

Re: Clueless but I would like to buy a home


@WarCulture wrote:

Wow, this was like a soap opera, I've read all of your updated post and found myself quite disappointed once reaching the end. I was literally waiting on the post that said "yay I got approved". Man this is a good read, good luck with it all. I plan to purchase a home within the next 2 years so i've learned a lot from reading your post about this situation. I'm rooting for you and following, again good luck


@Thanks so much, @WarCulture ! I should be resubmitting my app to the packager no later than next week. Thanks for the support !

BK7 Discharge 1/16
10/15 ~ EQ: 406; TU: 520
10/18 ~ EX: 666; TU: 646; EQ: 652
Message 48 of 110
Established Contributor

Re: Clueless but I would like to buy a home

We're on an popping ! I sent my new app to my loan packager after paying off those 2 cards. I went through all my previous emails and texts for his requests and made a checklist and sent every item he ever asked for ! Lol ! I'm ready. I did this on 12/11.

 

How about today he emails me and asks me for an updated credit report ? I sent that in my first email. It took 2 emails to send everything. I'm just praying a possible government shutdown does not happen or does not affect my application. It's crazy that government does not care how many innocent people's  paychecks they affect with shutdown grandstanding.

BK7 Discharge 1/16
10/15 ~ EQ: 406; TU: 520
10/18 ~ EX: 666; TU: 646; EQ: 652
Message 49 of 110
Established Contributor

Re: Clueless but I would like to buy a home

Hey, guys ! The government is back open and my application has been complete per the packager two weeks ago.

 

The packager is sending my app to FAHE on Monday. FAHE takes about 5 days to review it before sending it to USDA. I've already got my new money order for the USDA credit check.

 

So glad to be moving forward !

BK7 Discharge 1/16
10/15 ~ EQ: 406; TU: 520
10/18 ~ EX: 666; TU: 646; EQ: 652
Message 50 of 110