USDA loan questions

[Anonymous]

I went to the USDA site and found I am eligible for the guaranteed loan, income wise. What other requirements do they need? Are they like an FHA loan where I need a minimum of three credit lines for a year? Do I need just 3.5% upfront? Are they like FHA where they require a house inspected and might not give a loan for a place that isn't up to what they think it should be? Do you get a USDA loan through a bank like a FHA loan, or is it setup differently?

[Anonymous]

I also have the same questions about WHEDA. Any help would be appreciated.

[Anonymous]

I can tell you a little about the guaranteed.  We are using USDA Direct and have gone back and forth on whether to switch to Guaranteed.

Guaranteed is just like an FHA or a Fannie type of loan.  A bank will underwrite the loan and USDA insures it.  You would want to find out from your RD service center which lenders in your area do Guaranteed loans. 

There is not a down payment requirement with Guaranteed and you do not have to carry PMI.  But, they do tack on some kind of servicing fee...I think it's 3% or in that neighborhood.  And somebody said they charge a monthly servicing fee as well.  I'm not sure. 

I can't tell you much about the qualifications for Guaranteed because I think that might be more specific to the bank you choose to use.  All of the Direct guidelines and qualifications are here: http://www.rurdev.usda.gov/Handbooks.html 

Good luck, hth!

[ShanetheMortgageMan]

sweetpea3829 did a good job explaining the basics of the Guaranteed program.  It does require credit scores and trade lines, most lenders are looking for 620 or 640 scores.  No down payment, and in October there will start to be a monthly fee on loans, like FHA's, but much less.  The property requirements are nearly identical to FHA's.

WHEDA looks to only offer conventional financing at this point, they say they are coming out with FHA this summer, which is now, but their website says it's still coming.

[luvsandyshores]

Is that monthly servicing fee for loans that are made starting in October, or will they be applying it to existing loans?  I'm scheduled to close next month, and my lender hasn't mentioned anything about any servicing fees.

And can I mention again I'M SCHEDULED TO CLOSE NEXT MONTH!?!?!  The perfect house just appeared at the perfect time! 

[ShanetheMortgageMan]

Just new loans, not to existing loans.  Congrats.