USDA reserves??

[Davis9508]

Hi Guys! I recently decided to try for a USDA loan,, scary, I know lol

My middle score is 647,

no lates, collections, etc for more than 12 months.

I thought I'd read enough and was just good enough to get in. That's what I get for thinking huh?

I've been working with a very nice lady and this was her very first USDA application. When I spoke to her today she stated it gave her an automatic approval but I need to have $4,000 in the bank when I go under contract.

Is that normal? Did I completely miss this part in all of my USDA reading I've been doing for the past year?

[Anonymous]

Might be a bank overlay. We had no reserves in the bank but they did get copies of my retirement info and the terms for withdrawal so perhaps they used that as "reserves".

[Davis9508]

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@Anonymous wrote:
Might be a bank overlay. We had no reserves in the bank but they did get copies of my retirement info and the terms for withdrawal so perhaps they used that as "reserves".

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Thanks for the response! I gave them my retirement info too.  Guess it's just not meant  to be for me right now, 

[Anonymous]

There is more than one way to skin a cat, go to the USDA website and talk to a different approved lender. We did not use a local lender but a broker.

[Davis9508]

Very true. Thanks! I'm gonna take today to forget about the disappointment and celebrate my birthday. Next week I will come up with a new plan. 😊 Hope you have a great weekend!

[Anonymous]

Happy Birthday and enjoy your weekend

[kjade1030]

PLEASE talk to someone else who has USDA experience.  The lady may be nice, but even if you have been in the mortgage industry for years, USDA is a weird program to get a handle on.  We (mortgage industry people) run everything through automated underwriting, Fannie's is called DU, Freddie's is called LP.  We use it for regular conventional loans, FHA, and VA.  However, USDA has their own, called GUS.  It has its quirks and if you try to run it like you are running the other systems, it will not work.  You shouldn't need $4k if you don't need that money to close.  (That would mean 100% financing and seller is paying all closing costs.)  Reserves are good, but not necessary unless you have a low credit score or high dti.  I'd love to take a look if you need help but I'm only able to assist with the loan if you are on the east coast.  I'd still point you in the right direction regardless!!  Get her to send you an itemization, it sounds like the cash to close is not correct.