USDA Direct loan - NC - 2016

[amthystwlf]

Mortgage Scores 9/20/15 -  EX 574 - TU 635 - EQ 620 *have not pulled new mortgage scores due to waiting for items to update as noted below

FICO8 Scores 1/9 via CCT  EX 658 - TU 669 - EQ 668 *below info based upon CCT reports on 1/9/16

reporting util by CCT is 67% for EX & TU, 40% for EQ 

*AUTO LOAN REPORTING on all 3 - paid off by refi 12/17/15 <<updated EX only

*CC Util $1458/$4600 = 32% >>>> based on my records

CC #1 - open 8/2015 balance $0/$500 <<< not updated

CC #2 - open 7/2015 balance $0/$300 <<< not updated

CC #3 - open 3/2014 balance $0/$350 <<< not updated

CC #4 - open 3/2012 balance $592/750 <<< not updated

CC #5 - open 11/2015 $68/$700 <<< not updated

CC #6 - open 11/2015 $0/$1000 <<<not updated

CC #7 - open 11/2015 $797/$1000

CC #8 - CLSD 12/2013-7/2015 balance $0 <<< updated EQ only

CC #9 - CLSD 10/2015-12/2015 balance $0 <<<not updated yet

EQ report only items

open end installment loan $200 limit/$0 balance opened 9/2015

auto loan opened 12/2015 to refi loan <<I am cosigned and other party makes payments

consolidation loan $2000 opened 12/15

Other details

-EX is only report showing late - over 3.6 yrs ago

- no collections

- BK7 on TU & EX - discharged 2007 - no idea why it disappeared on EQ

-INQ EX-4, TU-6, EQ-11 (several from my CU over multiple products/others were auto loan 10/2015)

AAoA EX-6.7 yrs, TU-3.5 yrs, EQ-4.2 yrs

Prior reports with mortgage scores details (hoping these changes will bring my scores up above 640 mid)

BK7 reporting on all 3 reports - discharged in 2007

Util was at 82%-84% << mostly due to closed cards I was paying off

Collections reporting - 3 each CRA  - the CAs deleted these as they were not valid - services continued after they were to be shut off & I had moved from the area

Had no open installment loans

EX had an IIB acct that was still reporting and had been duplicated as well, both were reaged but BK was over 7 yrs past discharge when the report was pulled - removed by EX Special handling who could see they were reaged & duplicates

EX had what appeared to be an old bank account reporting late every month - 26 times reported on the report so I know it was hurting my score - bank deleted this

EX had a child support account reporting as collection from 2012 but with $0 balance/paid/closed - still reporting wrong but not currently in dispute

---

So without considering my income - well within the very low income range - do my reports look good? I had not planned to look for a home till summer but was helping someone else look and found a home that would be great for me. 

Home is 2 bed, 1100 sq ft on 3/10 acre land on edge of town - old farmhouse built in 1930. Had a new roof & water heater in 2013 & new oil furnace in 2014 per listing. Asking price is about 60% of tax value and its been on the market over 100 days. Photos shows it needs appliances, could use repainting, one wall has a section of damaged sheetrock - looks like the wall was kicked. I put in the asking price and current interest rate for direct loans on a mortgage calculator and using a 33 yr loan, payments would be about $200 month. Taxes are about $550 at full value but being disabled, I get a reduction so those would be lower. House is less than 1/4 mile from the fire department so that should be great for insurance rates, not in a flood plain. 

I have receipts for the past 3 yrs of rent, first year was subsidized but when it came up for renewal, landlord didn't want to fool with HUD regs any longer so I've been paying the full $400 month since Jan 2014.  I've paid $150 month to balance bill my power so I didn't have to worry about high bills in winter so power should be lower.

The car that is financed is joint with another party - they have it in their possession and make all payments but the loan isn't even a yr old. Is there a workaround or waiver or something for a cosigned item where the account is less than 1 yr old since they want to see the other party has made all the payments for previous year.

As far as my personal debts - I have the consolidation loan $80/mo, CC#1 @ $25/mo & CC #2 @ $35/mo. The consolidation loan is open ended so as I pay it down, I can advance a portion again to pay down the credit cards to help pay down debt since the interest rate is much lower (basically BT CC debt to installment at lower rate). The monthly payment doesn't change on the installment as long as I don't increase the max amount of the loan, they just extend the term automatically like a LOC (but they call it a loan). Right now I'm looking at paying an extra $125-$150 per month on those 2 CC.

[amthystwlf]

^^ anybody???

Also saw that you can't have significant outbuildings on the property. Is that just when you buy the property? Asking because I own an 8X10 metal storage building, setup here where I currently rent. Would taking it down and setting it up on a property I buy be an issue? I'd want to put it on a concrete pad instead of the blocks it's on right now.

Is there some place I can find a detailed inspection guide for USDA? In the photos of the house I see a couple of things but I think the home would appraise for enough to cover repairs. It has beautiful wood floors in most the house but the kitchen has ugly linoleum with a section missing where a dishwasher was located. Would things like replacing linoleum & paint prevent approval? Or could those types repairs be escrowed and I have it done/do with family and then submit receipts for reimbursement? For example, my SIL dad works for a drywall contractor so he could repair any small holes. And my brother has formerly worked construction but no longer does so he could lay linoleum or tile for me and things like painting. Around here stove/fridge/dishwasher are usually included so if they are not present I could use funds to buy them correct? Would it have to be through like Lowes cause our local Habitat store sometimes gets scratch/dent appliances donated by retailers and sell them way below retail.

Any other advice is appreciated. I'm over 40 and tired of renting, I want a place I can call HOME. 

[amthystwlf]

Over 150 views and nobody has any advice at all about the process? Even though no one has any advice, I will continue to post here to document what I find out on my own. Maybe it can help someone else in the future.

Emailed a bank that offers guaranteed USDA loans and they confirmed my income means I need to seek a Direct loan. Was trying to learn about appraisals on Google today and found a company locally where the appraiser used to work in my local USDA office as an appraiser so I emailed them. They are also a real estate broker and stated they would be glad to help me look for a home that would meet USDA qualifications. They also provided me emails for two people in the local office - neither of which was the person listed on USDA website as contact for my local office. I had emailed that person before Christmas and still no response. I have emailed the two people the appraiser recommended so I can start the process.

[Anonymous]

I found this in regards to USDA inspections: http://www.rd.usda.gov/files/MO-RD%20MO%20Guide%2011a_ExHomInspGuide.pdf

I'm also in NC and currently working with USDA Direct on a short sale.

[amthystwlf]

TY so much, saving it to read. This will help a lot in finding a place - maybe avoid some pitfalls. The place I found had a new roof & water heater in 2013 & new oil furnace in 2014 so those are good points. Been on the market a while too so hoping it stays there while I get this ride started. It's the kind of home I dreamed about as a kid - wood floors, decent back yard, porch big enough for a rocking chair....

[Anonymous]

I don't think an 8x10 outbuilding will be a big deal, especially if there is no garage. I believe that requirement is meant for buildings that you can use to run a business. Ask your area specialist to be sure.

I caught the age of the home you are looking at and I just want to forewarn you. With my eligability certificate I got the requirements for existing, new and mobile homes. It says on the existing homes page "Structual requirements: We can finance homes that are structually sound, are in excellent state of repair, and have no fundemental obsolescence (i.e. all room opening into one central room, the lack of central heating and properties that clearly cannot meet the thermal requirements). It is likely that many older homes may not be considered for financing." Just an FYI and I hope your home is an exception.

[amthystwlf]

Well, my prequalification form is submitted to the local office. I made notes for them because I have accounts that have not updated yet on my reports, however, I have my most recent statements - Jan 2016 - as proof. I had to resend the form as a pdf because they weren't able to open it after I completed it with Google Docs.

As a side note, my brother drove me out to locate the one house I had found. It's further out than I thought and the yard is very sloped, although it does slope away from the back of the house. The owner has someone there working on it - they were working on the porch when we arrived and they let us look around inside. Ceiling has asbestos tiles in attic and some are missing. That could be expensive to remedy and I was told the owner can't sell it as a habitable place with those tiles so he'll have to fix that. It has settled but it's 80+ yrs old. My brother does construction and he reassured me that small cracks at corners and door/window frames are not a major warning sign. Basement has no cracks - it's the floor beams under the house but he says it could be jacked up and reinforced. Someone let kids loose to ruin the walls upstairs - absolutely have to be painted. Several walls have places where someone definitely kicked the sheetrock but SIL dad works for a drywall guy so that would be no problem.

On the plus side - you can tell the roof was redone right. The eaves were repaired although the paint has come off the flashing so spots of shiny aluminum shows in places. The windows are all updated - but one is cracked bad - glass would have to be replaced. No fridge or stove but I could get those with the loan if I had funds because they are typically included around here. No signs of flooding in basement and we've had really heavy rain recently. Backyard was still soggy all over from the rain. No large trees really close to house but that also means no shade in summer. It's also about 1/4 mile from the FD which is a plus but road comes off a street which is considered an industrial area but this is definitely a residential area and mostly looks secluded. But in winter you can see a major road through the trees behind property.

I'm on the fence about the place now. My brother said if it would be big enough for his family (4 kids + 2 shared custody) he'd be willing to buy it for his family. Yard isn't big but with health issues I don't want a large yard. He said in AS-IS right now - he wouldn't offer over $30K cause of the asbestos tiles. My son has asthma - so those are a major concern.

I'll just keep browsing my MLS. One good thing, I found a real estate broker who used to be a USDA inspector AND they are still certified to do real estate appraisals. That means that when he shows me homes, he can give me better warning about potential problems. And he is still on good terms with the local office, which has to help as well.

[amthystwlf]

Well, they are looking at my prequalify now. They sent me an email saying I had forgot to list income. Since I knew I had included it, I pulled up my copy of the form and called them. When they printed the form, it messed up the alignment so they didn't see my SSDI/SSI and tiny self-employment until I told them exactly where it was listed. She asked me about a couple things on my reports. Said she should have my infile reports pulled by Friday. I made sure to ask because I keep my reports frozen and wanted to make sure they were available for her to pull so we agreed I would make them available through this week, just in case something comes up in their offices and they have a delay in pulling the files.

Fingers crossed they say I qualify, even with conditions. I have a couple high balance CC that I am working on paying down. And may possibly need the cosigner on the car loan to refi to get it out of my name.

[Anonymous]

I recently went through the USDA Direct Loan process in South Dakota. The house we got was built in 1927, so older homes aren't ruled out. How thorough the inspection is depends on the inspector. They USDA gave me a list to choose from. They do require that anything that is a safety issue is repaired by the sellers prior to closing or if the property appraises, rolled into the cost of the loan. For me that was replacing smoke detectors that were more than 10 years old, securing a junction box to the wall, installing a firewall between the garage and the house, and making some chimeny repairs. There were a few spots of missing flooring, but that wasn't covered by the repair escrow. After we moved in some electrical issues were discovered and the loan was adjusted to include that also because they were safety issues.

The process takes a long time, but its worth it. If you would like any specific questions answered, let me know. 

[amthystwlf]

Well, I see a new hard pull on my EQ report for 1-21-16 for Equifax Mortgage so my ride has started. Fingers crossed I get a good letter by the end of the month. We got loads of snow here so all government offices are shut down and the USDA office is further up the mountain than I am.