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USDA Direct w/650+ midscore


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106 replies to this topic

#1 gabbyraja

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Posted 07 February 2012 - 12:49 AM

I keep reading that there is no manual review when the midscore is over 640. Does this mean there will be no credit questions? No needing to pay off an old collection? Faster process overall? Dh has a chargeoff that looks less than 1 yr old, and I have tried literally everything but suing and they won't fix it. I want "no manual review" to mean this is not going to cause us any problem. Is that what it means? Does it mean they just say yes and they review your income info for a limit? Please say yes!

We're putting in the pre-app on Friday. We expect it back most likely next week with initial approval. It's after that that I'm not sure what happens... I want to be as prepared as possible so I can get a quick turn-around back to them. We're on a tight-ish deadline. Thanks for any help.



#2 Brian B The Loan Professor

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Posted 07 February 2012 - 10:04 AM

I keep reading that there is no manual review when the midscore is over 640. Does this mean there will be no credit questions? No needing to pay off an old collection? Faster process overall? Dh has a chargeoff that looks less than 1 yr old, and I have tried literally everything but suing and they won't fix it. I want "no manual review" to mean this is not going to cause us any problem. Is that what it means? Does it mean they just say yes and they review your income info for a limit? Please say yes!

We're putting in the pre-app on Friday. We expect it back most likely next week with initial approval. It's after that that I'm not sure what happens... I want to be as prepared as possible so I can get a quick turn-around back to them. We're on a tight-ish deadline. Thanks for any help.

Every loan gets manually reviewed - with an automated approval they are less difficult on the review - with USDA I believe it is now a 660 (things keep changing it used to be 620 someone will correct me if I am wrong) and the review is less critical - there is no way for an UW not to see and have a say in something like this.
B

#3 gabbyraja

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Posted 07 February 2012 - 11:11 AM

My forms, which I picked up 2 weeks ago, say minimum 640.

So, it still gets looked at, but it's not necessarily enough to get an auto rejection. Is that correct, then?

#4 gabbyraja

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Posted 10 February 2012 - 10:41 PM

Put the app in today. Midscore was 652. Wish us luck!

#5 boomhower1820

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Posted 10 February 2012 - 11:23 PM

Put the app in today. Midscore was 652. Wish us luck!


Good luck!

#6 Najus

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Posted 11 February 2012 - 07:31 PM

Good luck.

#7 Tpelc23

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Posted 11 February 2012 - 08:06 PM

Good luck! Please keep us posted on how it goes etc, we will be doing a USDA loan in a few shorts months

#8 gabbyraja

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Posted 13 February 2012 - 09:58 PM

Any idea what documents they're going to want from us? Paystubs, taxes, what else? Dh's workplace does The Work Number for employment verification. What else can I get on hand and ready to fax?

No word back yet on the pre-app I put in on Fri morning :(. If I don't hear back by like noon tomorrow (I asked them to email the results) I'm going to call and see "if there's anything they need from me to get it turned around quickly." We went out looking this weekend and probably shouldn't have. I really didn't think anything was going to be right, we were just getting a feel for what's out there in our suspected price range and give our realtor an idea what we were looking for. Only, we stumbled on a house that has pretty much EVERY SINGLE THING on our "This would be our perfect house" list. It's amazing, and would be just right in terms of price, size, and seller motivation (they literally just dropped the price the day before we saw it). I'm trying very hard, with no success, to stop thinking about it.

GGRRRRRR at the stupid USDA for making everything take so long. I think we could still make an offer w/o the preapproval, but I'm not sure and would it make our already almost low-ball offer weak...? (The house is listed high and realtor says go in 10 thousand under the new, lower price) I read some encouraging stories here about the USDA making it quick. 24-48 hours on the pre-app, 1-2 weeks for preapproval, and I was hoping for the same results. Here's to still hoping!

You all cross your fingers for me and I'll promise to do the same in the next few months when you put in your apps, k?

#9 gabbyraja

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Posted 14 February 2012 - 03:19 PM

K, I called. Pre-app APPROVED! :yahoo: :yahoo: Application is on its way to us to be filled out. Keep those fingers crossed!

Edited by gabbyraja, 14 February 2012 - 03:20 PM.


#10 Tpelc23

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Posted 14 February 2012 - 09:38 PM

what awesome news!

#11 gabbyraja

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Posted 15 February 2012 - 09:10 AM

Well, all this really means is we're poor enough, lol. But, it's a step.

#12 gabbyraja

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Posted 17 February 2012 - 09:59 AM

I had many questions while filling out the app, so I called the contact yesterday. He set my mind at ease very much. He said that I did have it pretty much correct in the first place. He said when 2 scores are under 640 they go through the file with a fine-tooth comb, call your landlord to make sure you've been paying your rent on time, etc. As long as 2 of his scores are over 640 they really don't pay much attention to the CRs. LOE in the file and we're on our way. I'm still in disbelief, but he said it's true. The original pre-app approval letter said something like "Your TU score was 661. If your other 2 scores are less than 640 there are 3 items on your credit report that would probably prevent your approval for a mortgage (2 collections, 1 charge off)." Aside: one of dh's collections that I had removed almost a year ago was reinserted (and reaged to brand new in Jan instead of 6 yrs old) THE SAME MORNING that this pull was made. I was FURIOUS! Luckily, it doesn't seem to have mattered. And I'm working hard on getting it back off NOW! So, I have no doubt his previous TU score of 709 or so would have shown if they had pulled the day before.

He also eluded to the fact that we could get our certificate in a week or so if everything is together and correct in the paperwork we turned in. I typed anything I had to say, printed EVERY page of everything, just in case they need it, collated and stapled. Very professional, very complete. I am trying hard not to be the one leaving any stumbling blocks in the road. Make their job easy and they'll make my life easy, right? I'm taking it all in in person today. Keep those fingers crossed!

#13 harmstrong523

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Posted 17 February 2012 - 10:18 AM

That is great news! I wonder if it is the same for guaranteed.

#14 gabbyraja

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Posted 17 February 2012 - 10:51 AM

It is definitely not the same for guaranteed. Guaranteed is essentially the same as any FHA loan, subject to the standards of the LENDER. So, the bank makes all the decisions. And there is no bank that's just going to push your paperwork through. Plus, with a 1% interest rate we can get twice the house we could get with literally any other loan, so there were 2 reasons for us to go this way. With as many children as we have, it will be a very long time until we have enough income for them to force us to refinance, too.

#15 gabbyraja

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Posted 17 February 2012 - 06:55 PM

Dropped off the app today. Good and bad news.

Good news: She went through everything needed with me and I had everything, so there should be no delays. Mon is a holiday (Doh!) but it will be in the system on Tues. The reviewer just had eye surgery, so he's on restricted hours, so it'll take about a week. Hey, a week is not that long when I was expecting a month, so yay!

Bad news: While I waited for the person who takes the forms I read a brochure. It says no houses with in-ground pools or "farm structures." The house we wanted just happened to have an in-ground pool (we weren't looking for a pool, it just had one and we thought that was fine). CRAP! She said it would be denied. I assumed it was a safety thing like FHA, but she said it's because that's considered a "luxury item" and they are giving loans to poor people, essentially, so it wouldn't be good to give a loan for a luxury house. The barns she said because then you could turn around and start a farming business and they're not funding businesses, just residences. So, someone could make an income and not depend on state assistance or other low-income programs anymore, but that's bad... :dntknw: As long as it's their primary residence and it doesn't cost too much, who cares?

Anyway, now there's no huge rush and we're back out looking at houses. Man, the loss of this house is getting me. It had a heat pump. That would have cut almost $2,000 a year off our bills. Sigh... Everything happens for a reason. I have to believe it.

Edited by gabbyraja, 17 February 2012 - 07:00 PM.


#16 Chris in OK

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Posted 17 February 2012 - 07:04 PM

Congrats. Our app package will be submitted on the 24th. I can't wait.

#17 Tpelc23

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Posted 17 February 2012 - 07:11 PM

Is the no pool for the direct loan only? We live in FL and tons if houses have them....we will be doing guaranteed though

#18 Brian B The Loan Professor

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Posted 17 February 2012 - 07:20 PM

USDA is funny that way - certain things are instant denial - you found two - another is multi family
What is difficult is the luxury homes? This is such a gray area. Who knows what they will see as too much.. another is having savings - how much is too much before you are considered able to get another type of loan..A few years ago I helped someone get a guaranteed loan in Alaska - well USDA is a little different in certain rural areas of Alaska - the income limits are the highest I had ever seen with family incomes allowed up to around $150,000. They also had I believe roughly $50k in savings....The cost of living there is so much higher that this wasnt seen as too much....also if you lived in an area that couldn't accessed by road the income limit was 150% of the normal limit. In the end they got a loan for a home in the 400k range that would never have qualified here just based on their savings account and income limits but there it went through without a hitch - everyone at the bank had to sit and review the guidelines since it seemed so unlikely to get through...... The client was ecstatic - when I visited a few months later on a cruise they hooked me up with a trip on a fishing charter :clapping: .....didnt hurt that she was the manager for the company that ran the charters.....

Good Luck OP sorry you had to find out after getting your heart set on a home that the pool was a deal breaker - there will be another one out there for you.

B

#19 Tpelc23

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Posted 17 February 2012 - 07:20 PM

answered my own question you can it just does not count toward the value the house must appraise out for the purchase pricewithout including the value of the pool.

#20 Brian B The Loan Professor

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Posted 17 February 2012 - 07:21 PM

Is the no pool for the direct loan only? We live in FL and tons if houses have them....we will be doing guaranteed though

Guaranteed as well

#21 gabbyraja

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Posted 17 February 2012 - 07:33 PM

Our big problem is that we have 5 children and grandma is living with us. The 1800 sq ft limitation is killing us. For most people 1800 is plenty, but for 8 people, who are only getting bigger... I know we'll find something, without a pool, but something under 1800 is the hard part. This was a quad level. Everything about it was perfect, very open, sunny, 3 season's room, 1.5 acres... But the best was the fact that it REALLY had 2400+ finished sq ft, some of it JUST under grade so not included in the sq footage, but still not really basement-y (dark, damp, etc). So, it would have fit their guidelines, and still would have worked well for us. Sigh... Nothing else on the market that fits all that in the right area right now. Luckily, we've still got about 6 weeks to look in order to get out of our rental w/o paying double rent for going month-to-month. However, this is only the second house I've liked since July of last year. Sigh.

#22 gabbyraja

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Posted 17 February 2012 - 07:33 PM

GL Chris! I'll keep posting with updates so you can get an idea of what it might be like.

#23 mother.jeni

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Posted 19 February 2012 - 04:45 PM

We were pre-qual in Nov, but had to send in some non traditional credit papers (ie utility bills etc) And we didn't get final approval/certificate until Feb 14 :yahoo: (HAPPY VALENTINES DAY!) Anyway, I was just browsing through this forum. Because we were told to move fast due to funds. Which we did. We found a house in our school district and everything. Foudn an awesome realtor we look at houses two days later, and went in to put an offer (this house is 1/2 price of what they originally said we could qualify for) :D YEAH! on friday (next day) or rather two days ago. We got a call on Saturday saying seller verbally accepted our offer (just need to wait for the signed contract to come back, then it goes to USDA RD. So basically it took less than a week (if he signs the contract -verbal is not a done deal) for us to find a home and make an offer! Hopefully they can get the inspections done quick :huh: . Kind of scary how fast it all came together. And there is still so much more to go. We were told expect 45days until closing on this type of loan. Hoping it won't take that long though. House was recently remodeled, and it was under a VA/FHA loan before improvements, so I hope it would qualify again. My concern now is this 1800 sq. ft. I read about here. This home is technically 1863 or 1888 or so and I don't want to be denied over something so silly as a few sq. ft. Anyone else heard of this. I knew the eligible property had to be modest and not able to subdivide (which it is), but sq. ft. ??? more info is appreciated. THanks! I'd also be happy to answer any questions you have, since I have been researching this type of loan last summer and found where/how to apply. I did not go through any institution or agent. I went directly through USDA RD (local office) and got pre-approved on my own -Most lenders don't know much about, or want you to get this type of loan -it's really not worth their time since they can get no fee for this type of loan. Century 21 has been a lifesaver though. I contacted 4 different realtors about differnet properties, and Century 21 had us looking the next day. Everyone else said they would email us properties, and call back after a few days to set up viewings. Wish us Luck, please! And good luck to all who are able to take advantage of this amazing opportunity! ^_^

#24 Tpelc23

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Posted 19 February 2012 - 08:20 PM

Can I ask about 1,800 square feet thing I keep reading...I have read through everything that was given to me and I don't see a size of house restriction at all, just a dollar amount based on area and the pool issue.

#25 mother.jeni

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Posted 19 February 2012 - 09:18 PM

I have looked over all the paperwork I have, and nowhere does it say that there is a max. sq. ft. requiremnt, so I am going to say this is just mistake in information???:huh: I'm really interested in how long it has taken from signed contract (agreement between buyer and seller regarding buying the house for a set amount of money and conditions) to closing on a USDA RD Direct Loan from any others who have gone through this process. :wave:




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