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Old 04-11-2012, 07:54 PM
 
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Default USDA Rural Development Home Loan

I am closing on my USDA Rural Home Development loan soon and the loan says I cannot have anyone living in the home other than myself for 12 months. What can or would happen if I allowed someone to move in with me before the 12 months is up? Will the USDA actually check to ensure that no one else is living with me for 12 months? Any insight would be appreciated.
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Old 04-12-2012, 03:46 PM
 
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Are you sure it says that you can't have someone live with you? I'm thinking it likely means that *you* have to live there for 12 months (e.g., you can't move out and rent it to someone else), not that you have to live alone.
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Old 04-14-2012, 09:00 PM
 
Location: MID ATLANTIC
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Quote:
Originally Posted by cdunde1 View Post
I am closing on my USDA Rural Home Development loan soon and the loan says I cannot have anyone living in the home other than myself for 12 months. What can or would happen if I allowed someone to move in with me before the 12 months is up? Will the USDA actually check to ensure that no one else is living with me for 12 months? Any insight would be appreciated.
You do realize this is a program that only a select segment of the population is eligible for?

The total income of all wage-earners of the household being 80% or below the median average is what entitled you to the reduced rate, reduced MI and no down payment program. If your girlfriend that makes good money moves in and now you are over the max income, you've worked around the system. If you get paying roommates, you're cheating the program. The rules for this program, like all others, is about intent. If your GF or other family members put in for a change of address the minute you close, you've committed fraud.

Now all that said, I am not familiar with any documents with such statements. What document put this in writing? Sorry, but there are many ways they catch occupancy fraud, but we don't promote fraud here, so I won't discuss their methods.
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Old 04-14-2012, 09:20 PM
 
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Quote:
Originally Posted by SmartMoney View Post
You do realize this is a program that only a select segment of the population is eligible for?

The total income of all wage-earners of the household being 80% or below the median average is what entitled you to the reduced rate, reduced MI and no down payment program. If your girlfriend that makes good money moves in and now you are over the max income, you've worked around the system. If you get paying roommates, you're cheating the program. The rules for this program, like all others, is about intent. If your GF or other family members put in for a change of address the minute you close, you've committed fraud.
That isn't true. There are 2 types of USDA loans, Direct and Guaranteed. Direct loans have more restrictions but depending where you live, the Guaranteed loan has much higher earning limits. I qualified for one of these loans with an income of over $80K.
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Old 04-15-2012, 09:09 AM
 
Location: MID ATLANTIC
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Quote:
Originally Posted by Djuna View Post
That isn't true. There are 2 types of USDA loans, Direct and Guaranteed. Direct loans have more restrictions but depending where you live, the Guaranteed loan has much higher earning limits. I qualified for one of these loans with an income of over $80K.
ALL USDA loans have income caps and are easy targets for abuse. Just because a program has a higher cap doesn't mean it doesn't get abused. If you bought your home with the idea of a significant other moving in with you, a SO that makes enough to put you over the cap, you committed fraud.
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Old 04-16-2012, 09:13 AM
 
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Where at in your paperwork did it say you cannot have anyone live with you for 12 months? I couldn't find that anywhere in my paperwork for the USDA loan I just got.

Do you have the actual text of the clause in your loan? Sometimes it'll come with a list of penalties. You can call the USDA and ask about it and see if there's a way around it and what happens if you break it.
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Old 04-16-2012, 08:28 PM
 
Location: MID ATLANTIC
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I suspect the OP's lender had their own form as part of a QA process. I combed the USDA docs and did not see it, however, in the form listing of household income and the certification the buyer makes, there's a whole lot of emphasis on the information provided is truthful as to the income information. I can see where a bank would add their own wording.
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Old 04-18-2012, 05:25 PM
 
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Quote:
Originally Posted by SmartMoney View Post
ALL USDA loans have income caps and are easy targets for abuse. Just because a program has a higher cap doesn't mean it doesn't get abused. If you bought your home with the idea of a significant other moving in with you, a SO that makes enough to put you over the cap, you committed fraud.
I bought our home as married couple. No fraudulent dealings here and I don't like your accusatory tone.

Last edited by Djuna; 04-18-2012 at 05:33 PM..
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Old 04-20-2012, 05:15 AM
 
Location: MID ATLANTIC
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Quote:
Originally Posted by Djuna View Post
I bought our home as married couple. No fraudulent dealings here and I don't like your accusatory tone.
It's not a matter of being accusatory.......it's in black and white in the guidelines. If your married income is over the limit, you found a lender that showed you how to get around the system.......and guess what that is called?
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Old 04-20-2012, 07:22 AM
 
11,151 posts, read 8,921,563 times
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Quote:
Originally Posted by SmartMoney View Post
It's not a matter of being accusatory.......it's in black and white in the guidelines. If your married income is over the limit, you found a lender that showed you how to get around the system.......and guess what that is called?
There's no reason to suggest that *Djuna* committed any kind of fraud, so let's please stick to the OP's question.

Thanks.
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