USDA Guaranteed Loan Stress

Anonymous · ‎08-06-2010

We are currently under contract on our dream home, and the only reason we are is because our loan officer assured us we could get USDA financing since their new fiscal year starts in October. As it stands (according to the LO) they have no money left right now, hence why we have to close in October when they get more funds.

So, she calls me today and tells me that she is afraid the USDA loans won't get approved by the president, and that there may be new origination fees, possibly PMI, etc. in the new USDA fiscal year and that she can't tell me what the fees are until October, so she thinks we should go FHA. We do NOT want to use FHA because we want to keep more money in our pockets at the moment to get some stuff for the house, plus the payment is a smidge lower than FHA.

I guess I feel like I am lost and don't know what to do right now. Our out-of-pocket costs with USDA looked to be about $7K but the good faith estimate she gave us with FHA was $11K+. Is she right? Should I get another lenders opinion? Should I even bother going through with the inspection? We do have a 7-day out period, and that window of opportunity to get out of this closes on Tuesday. I am lost, so sad and so stressed. Any advice would be great!

I don't know if matters any, but the purchase price is $130K, we have about $11K in savings and both have scores in the lower 700's with no bankruptcies, repos, etc.

Anonymous · ‎08-06-2010

Anybody? I am really stressing out here and want to know if I should just stop the home buying process or carry on and try to get this USDA loan funded,

Anonymous · ‎08-07-2010

I believe there are some banks that are closing USDA loans right now in spite of the status of the Bill. I am going through Capaha Bank in Illinois, but I believe there are others. Perhaps some of the more knowledgeable members could chime in...

Anonymous · ‎08-09-2010

Thanks!

Anonymous · ‎08-09-2010

Besides, I thought I read somewhere that President Obama signed the bill on July 29th. Am I mistaken??

Anonymous · ‎08-09-2010

See, that's what I thought too. It seems my loan officer is just really adamant about us NOT doing a USDA loan, so we're getting a 2nd opinion at another bank tomorrow to see what our options are. I just feel like she's biased towards FHA or something, and I can't really see why. Maybe there's more work to be done with a USDA loan? Who knows, but all I know is that I really want this house and I really want it with USDA! It's a fabulous program.

Anonymous · ‎08-10-2010

Hey Monica..I'm new here so I just saw your message.

I actually work at a mortgage company, and at least for us we prefer FHA over USDA because we can make a little more on an FHA loan. Plus the USDA requires more work for us to get the loan closed.

I'm also in your shoes and buying a home. I'm doing a USDA Loan, and my loan officer told me straight up to do USDA as it's the best deal and there was no reason to do FHA if you were eligible for USDA. (There are some pluses to FHA over USDA because you'd have equity in the home....but as long as you're going to have the home for a little while, USDA is the way to go.)

Anyway, we are actually closing the end of this month!

Everything so far has been a smooth process, and we've done the inspection, appraisal, title commitment, and lined up insurance.

I'm not sure what your situation is, but if they can close mine this month, hopefully they can qualify you too!

If you have any specific questions, just let me know!

Definitely check with another lender...the 1st lender I went to, said you have to wait until October, and he said their bank wouldn't do them. My friend told me of another local bank that was doing them. I called them and sure enough.....they are....and we're under contract.

Good luck!

PS - I'm in Missouri and I just contacted the Local USDA Office for Missouri and they told me which Lenders were doing USDA Loans.

Maybe your state has a webpage like this? I'd just google USDA Housing (Name of your state) and hit search.

Here's the link I found contact info on:

http://www.rurdev.usda.gov/mo/lo-list.htm

http://www.rurdev.usda.gov/mo/sostaff.htm (At the bottom it says Single Family Housing, and all of those people helped me I just emailed all of them!!)

Hope this helps!