USDA Difficult process?

[Shellie]

I am currently working to repair my credit like all of you have/are. I spoke to a mortgage company and they said they could get me approval with a min of a 620 score thru USDA.  They said I must have $0 balances on anything negative listed on my credit.  I'm working toward that! I spoke with a realty company today and she said that USDA and FHA are extremely difficult and long drawn out processes to get a home loan.  She said I'd be better of to go thru my personal bank.  She said that it is also very difficult to find a house that USDA will approve.  Does anyone have any knowledge about this? Any of it!  I have read thru the forums lightly and I haven't found much directly related or closely similar.  Any help is greatly appreciated.   

[lifeiswhatImakeit]

Honestly I would say find another realtor. Is USDA/FHA a little longer process than conventional? Yes. But I am currently in processing of  a USDA home and thank God I have not run into any crazy issues and no my credit is not perfect. There are income and location requirements for USDA but if you find a home in the accepted location and you are within the income requirements I think it's a good program. You have to understand that USDA is a 100% financing program so yeah things are going to be a little more complicated. But I don't see where it is so long and drawn out. My realtor just recently closed on another USDA loan in 45 days and he said they could have closed a few days earlier but there were scheduling conflicts. And so things are in order for me to close on time which we've based on 45 days. But it sounds to me more like the realty company you spoke with just doesn't want to deal with USDA/FHA programs. My realtor has been great he knows USDA/FHA and what type of things they look for. Find someone who knows USDA/FHA and I'm sure they will be more than happy to help you. Don't let someone else decide what is best for you and your financial situation. You will be paying the mortgage not them. There was even about $100 difference with my FHA monthly payment vs USDA  so USDA was the best choice for me.

Good Luck!

[Shellie]

Thanks for your reply.  The realtor was telling me about a house and thru the conversation she let out more and more about what was wrong with the house.  Initially it was in need of some new flooring in a couple rooms, not a big deal.  Then she mentioned the plumbing problems etc.  She said with USDA you cannot buy a home that needs any work.  Luckily she isn't my realtor.  I just called to get some additional info on some houses offered thru the realty company that she works for.

[brownj12]

You can certainly buy homes that need work with USDA. USDA requires them to be livable, the plumbing stuff may need to be fixed before purchase depending on the problem. USDA requires the water to run and toilets to function. As long as you could move into the home it will make it through USDA, even if it needs repairs before you would want to live in it. Find a realtor who does a lot of USDA loans, they will know exactly what will pass through and what wont.

To confirm what the other poster said my payment is $75 less per month with USDA than with FHA, and I saves about 3.5% at closing.

[Shellie]

She didn't go into great detail about the plumbing issues.  She said "the house is being sold as is".  She was odd to begin with.  It kinda sucks because it seems like it could be a really great house for my circumstances.  I am not very knowledgeable as to whether I have to deal with her or if I can deal with some one else? I am not ready to buy yet tho so it doesn't matter...yet.  I have just been keeping my eye open to see what's out there. 

[Jaguars28fan]

It doesn't sound like the house would be a great choice for usda.  USDA wants the house to be in pretty good shape, if not they'll have to make repairs.  The house also can't appraise for under what you're paying.  It also needs to be in the accepted area.

USDA isn't the easiest process. It's rather long and the wait is rather stressful, but it was well worth it.  With FHA, not only do you need the 3.5 % down, you'll be paying the larger PMI each month (which adds up quickly).  Talk to a lender asap, many can be very unhelpful, but it only takes one.  Once you find the right LO, he or she can tell you exactly what you need to do.  My credit score was as bad as you can get, with many unpaid chargeoffs, and many negatives.  Within a year in a half, I only had one remaining unpaid chargeoff (lender didn't require it paid) and my score was over 640. 

[Shellie]

I have better than half of the stuff on my credit either paid or supposed to be falling off by the end of this year.  One of the mortgage people I spoke to said not to hold my breath about things falling off because she rarely, if ever sees it happen.  She said I need a minimum of a 620 with everything on my credit showing a $0 balance.  The only thing I am really concerned about right now is a state tax lien for around $2800.  I have either paid off or am making payments to OC's for everything with the exception of the things that are supposed to be falling off this year. 

[Shellie]

I am shooting for the end of this year or beginning of 2014 to be able to buy.  I am still paying things off.  Everything should be paid or fallen off by December.  I am also adding to my savings account during all of this also. 

[rebuildingincb]

I am a builder, and most of our new homes fall into USDA territory (I believe it is set up by zipcode). I would recommend you try to find a new home community under the USDA area (a realtor should be able to help if they are worth their weight, if they aren't willing, move on). We are selling homes to people in the USDA homes with no money down other than closing costs, and we are paying up to $3500 in closings (covers most homes in the $100-$175k range here). And yes it takes a little longer sometimes (45 days vs 30), but it is worth it in the end.

I don't know all the qualifications, I know you have to have 620 and all negatives paid, and I believe there are income restrictions.

Best of luck to you!

[Shellie]

I don't think I would be able to afford a $150,000 home.  I make around $25,000/yr.  Single mom of two.  The morgage lady I initially spoke with said a $85,000 home would likely be in the $600/mo payment range.