USDA Direct w/650+ midscore

[ChrisT]

Turns out the USDA interpreted the inspection report wrong. The roof does not need to be replaced. Yay! And the seller said the school does have some paperwork on the easement, so she's trying to get her hands on that and that and a mortgage survey SHOULD satisfy the USDA on the "encroachment." So, appraisal should be this week, then seller can fix the few tiny things found in the inspection, then we only have underwriting... This is closer than we've been yet!

 

Hey gabbyraja, I've been following your post for a while. Me and my wife applied for a USDA loan and had a few questions. We filled out the pre-application, got the full application by mail less then a week later. Have you heard any estimates of how much the loans are for? I'm a self employed contractor so most of the banks want nothing to do with me, so I'm hoping we are approved for the direct. You also got the direct loan correct? How is everything going on your loan at the moment?

[gabbyraja]

The loan limits all depend on your area, and they vary depending on the county you're looking in. We were looking in 3 counties, and the limits were 145, 153, and 158 in these counties. But we're in central MI. It depends on what makes a "modest" home in your area. If you look here http://www.rurdev.usda.gov/HSF-Area_Loan_Limits.html by your state it will show you the loan limits in your area.

 

Yes, we are doing rural direct. I'm glad my thread could help you. I actually spoke to the "loan officer", if that's what you'd call him, last week. He said the appraisal will be on Tues or Wed of this coming week, and he'd get the report in 24 hours after (So, my fingers are crossed for 4 more days). I pestered him about whether of not we were still something like 6 weeks from close. He finally admitted "I would better guess that closing would be on the 6th IF things come in timely." That means we're 3 weeks from close!

 

I don't know when in the process underwriting takes place, or how long that takes, but I would guess it will happen just after the appraisal next week. We are freaking GEEKED! Dh has to take the homebuyer's ed class on the 27th. He said that he would definitely have a definite close date by then. Oops, I mean, we're guardedly optimistic. Not counting our chickens, you know...

[ugghh]

Just wanted to say, I have not posted but I am following your thread. Thanks for keeping it updated. Good luck!!

[gabbyraja]

A 3 yr old collection fell off dh's reports a couple of weeks ago. I was surprised, but not looking a gift horse in the mouth. Today Midland popped up as a brand new collection on dh's report. They bought the old collection, and it's now reporting as brand new. I got advice to do the 1-2 punch and this house thing may not be over, and I'm taking it, but we're pretty sure it's over. Where's the Pounding-the-ground-on-hands-and-knees-and-shouting-"WHYYYYYYYYY!?"-at-God emoticon?

Edited June 23, 2012 by gabbyraja

[ChrisT]

Well I'm hoping you have good luck with this and it'll get dropped. I'm excited and just waiting to hear something back from the USDA...they called me the other day to get more employment history.

[gabbyraja]

We structured the offer in a particular way, for particular reasons. They were asking 149,900. We have $4000 in an IDA for closing/prepaids. We have to pay $1600 to break our lease, plus the 2 months notice we have to give before leaving while simultaneously paying our mortgage payment. Since we can't really give notice until we close (because there are no guarantees and we can NOT be homeless with 5 kids), that additional rent is another $1618. That's $3218 in fees on our rental, all because we couldn't get this house thing done last Spring.

 

So, since we were preapproved for 158 we offered 152 with $4,000 in concessions (concessions would pay our costs for the rental and pay for a moving truck). They net 148, we get cash back at closing for our carrying costs. Offer accepted and we're good! The SEV is $76,500, so we really believed it would appraise around 152.

 

Appraisal came back today. $147,500. The LO opens the phone call with, "It's always something with you guys isn't it?" I said, "Yes. What is it this time?" WTF?! Why can't we get this done? Oh, and LO says they are almost out of money for the year, so we need to get this done NOW or we have to wait until they get funding again. LOVELY!

 

So, we're going to wait for the letter (he didn't have time to get it done tonight but will have it to me tomorrow) and go back to sellers with it and "$148,000 plus $1,000 in concessions or we will have to walk." We have no choice. We were supposed to be out of here in April, before our lease was up and our rent went up $100/month. We were supposed to be saving over $400/ month by now, and not having to pay $1600 in lease breaking fees. We're out of money; on new brakes and tires (both were dangerously worn), rent, multiple inspections, etc. Emergency fund is gone. Without the grand we won't have the money to pay the collection. My mother has been living with us, and she starts collecting Social Security in Aug. If we can get this deal done we're sitting pretty with the additional income. If not...

 

We can't do this anymore. It's all or nothing. Fingers crossed.

[ugghh]

Sending positive thoughts your way!

[gabbyraja]

Sending positive thoughts your way!

OMG! OMG, OMG, OMG! Your ( and everyone else's) positive thoughts must have worked. I just talked to the LO. I said I was concerned about a collection on Dh's report ( there was the original from verizon there when we applied) and whether or not we'd have to pay it off before we could cloe like with any FHA loan. He said we didn't have to worry about it! It goes back to my original post on this thread. Aside from a federal lien, if your mid score is over 640 when apply they don't require paying anything off, or LOE or anything. You're simply approved. They don't pull again before close. He said the original is good for 6 months and they don't pull again. After all the crap we've been through, this was definitely the right loan product for us!

 

He also said that as of Fri there was $250,000 in "the pot", so if we think we can work out this appraisal stuff with the seller he suggests putting in the request for funding immediately. Otherwise someone else could grab it and we'd have to wait to see if the was more funding trickling in next week or the week after. I told him to do it NOW! We will work this out with the seller, or we'll be waiting til Oct, anyway, so just do it!

 

NOBODY stop sending those positive vibes, PLEASE! There's only about a week and a half to go!

[gabbyraja]

Sellers signed the addendum. 147,500 with no concessions. Moving forward...

[ugghh]

Woot-woot!

[gabbyraja]

Thanks ugghh. DH's homebuyer ed class is today (he's there now). He's supposed to be coming home with a close date. Fingers crossed.

[gabbyraja]

It occurred to me today that I did not yet mention our IDA (Individual Development Account) in this thread, and that people going USDA direct might be interested in the IDA, or other assistance. It's a thing your local State Housing Development Authority offers. They match your savings. You have to qualify based on income, much like for the USDA RD loan. In our state we signed up and saved for a minimum of 6 months. We save $1000 and they match it with $3000. This gives us $4000 for our home purchase (they also have them for education and starting a small business).

 

Here's a thread with more info on assistance type programs we were talking about a yr ago. http://creditboards.com/forums/index.php?showtopic=468958

[gabbyraja]

The LO with the eye troubles is having more eye surgery. He'll be out for 8 days starting tomorrow and NOBODY is going to so much as pick up our file while he's gone. So, no closing on the 6th. However, if we get all of our paperwork in by today we can close on the 16th when he gets back in the office. So, I booked butt over the weekend to get him everything he needed from the seller but the survey, and I just got the call that the survey is being scanned and emailed as I type. That was the last thing we needed. There should be nothing else holding us back! 16th, here we come!

[gabbyraja]

We got him everything and we're set for the 16th! Yay! Keep those fingers crossed 1.5 more weeks!

[gabbyraja]

Paid the first year's insurance today. On a credit card. (Been told we get it back at closing, and we can pay the cc with that then, plus I get the bonus points, so win-win.) Only 5 more days to go...

[dhoopup]

awesome bet you can't wait

[ChrisT]

I am going to have to raise Holy Hell I guess...I called to see how my loan application was going and was notified that they hadn't received the employment verification or the landlord verification. My landlord said she sent it back July 1st and my employer sent it back like at least 15 days ago. I called and got the area director on the phone and he didn't call me back like he said he was going to yesterday.

[ChrisT]

Well I kept calling and calling and finally got the area director on the phone and he called me back saying he needed updated information about my job (updated pay stubs i guess). So i gave him their fax # and he asked if i was in a probationary period at work but i am not. So i don't know if they found my papers or what but he didn't say anything about them. Was this an attempt to try to get me to give up or what..I hate I have to stay on their butt about it constantly but it seems like they are trying to get out of doing their job.

[gabbyraja]

YEEEEEEEEEEEEEEEEEEEEES! While I'm PRETTY sure that they are not ACTUALLY doing EVERYTHING IN THE WORLD to make you give up, I'm also pretty sure that there's some kind of unconscious thing that makes them do that. Fewer people that actually make it through, less work they have to do. I'm glad you got ahold of someone that could do SOMETHING, but be prepared to call them every 2 days, without fail, until the moment you close. You HAVE to take charge and controll the process yourself. Sucks, but if I had to give a piece of advice, that would be it.

[gabbyraja]

BTW, in case anyone reading this now or in the future would want to know, the initial cash outlays for use were:

Fee for USDA to pull credit with initial application: $32

Inspections (house/pest/radon): $450 (because we got to this point on 2 houses, we've now paid this twice)

First year's Insurance: $815 (got a $62 discount for paying the whole year upfront)

Earnest Money Deposit: $1000 (our IDA paid this for us)

 

Everything else can come from our closing money and/or be financed into the mortgage (assuming the house cost little enough to have mortgage money left). Because we get the $3000 match money from our IDA, our closing costs will be covered and we should get money back at closing. We can only have up to $1886 back at closing. This was on our GFE, I don't know if it's universal to USDA across the country or if it's just in our area. So, anything we might get back over and above that amount goes to our principal.

[ChrisT]

Yay! I finally got the area director to verify they got my employment verification he told me to call Monday and that the other lady should have my paper done and have a decision about the loan for us.

[gabbyraja]

GL!

 

We got our closing docs yesterday, and a closing time of 4:00 pm on Monday. Just 2 more days!

[ChrisT]

Well I'm glad for you gabby...it is a crazy road but will be worth it in the end. Did they give you an offer for the direct and the guaranteed? I am hoping we get enough to buy a nice house for my family...my wife will be tickled pink.

[Chris in OK]

How'd it work out, gabby? Are you closed?

[gabbyraja]

We bought a house!

 

Closing went smooth as a baby's butt and we grilled the sellers on all kinds of things like what the neighbors are like, can you hear a lot of noise from the soccer games at the highschool behind the house (football games, with all their night-time noise, are held across town, yay!), etc. They were very amiable and told me to email any time I might have questions.

 

It's got an acre and a half, 95% enclosed by huge trees and bushes so VERY private, literally on the other side of the line from town (so we're "in the country"), woods on one side, open field across the street, neighbor that pretty much keeps to himself on the south, and the highschool behind the 100 feet thick wall of cedar trees (which houses an Olympic-sized swimming pool that is open to the public). There are a few maples in the front, and in the back the shade trees are black walnut trees everywhere, which most people hate, but I love. They make a great syrup in the spring (like maple, but nutty), and the hulls are great for ridding people and animals of parasites. Plus, because it's so close to town (and only 15 minutes from the city, btw) it has a well but uses natural gas and has cable access (means super cheap utilities).

 

Took the kids over after closing and roasted marshmallows, on this near-100 degree day, and played on the slip n slide. Good times...

Edited July 17, 2012 by gabbyraja