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Old 07-24-2008, 08:43 AM
 
Location: Raleigh, NC
467 posts, read 1,483,492 times
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Hello -

I've applied for a USDA mortgage. My lender has approved it, and submitted to the USDA for their underwriting. What usually happens next? Does the USDA follow the lender recommendations? Or could I expect a rejection even though the lender approved? This is for a Guaranteed loan.
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Old 07-24-2008, 09:04 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 14,638,718 times
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USDA follows their own recommendations, and their own guidelines.
The lender needs to be within these measures to get your loan approved.

I would also apply for FHA...

Quote:
Originally Posted by Lisalrenee View Post
Hello -

I've applied for a USDA mortgage. My lender has approved it, and submitted to the USDA for their underwriting. What usually happens next? Does the USDA follow the lender recommendations? Or could I expect a rejection even though the lender approved? This is for a Guaranteed loan.
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Old 07-24-2008, 09:19 AM
 
Location: Raleigh, NC
467 posts, read 1,483,492 times
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so would a lender issue an approval (I have a commitment with conditions letter, the only condition being approval by the USDA) using the guidelines utilized by the USDA, or their own?
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Old 07-24-2008, 09:21 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 14,638,718 times
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No lender will issue an approval on a government loan with THEIR guidelines. They HAVE to conform to the guidelines or it will be a portfolio loan.

Quote:
Originally Posted by Lisalrenee View Post
so would a lender issue an approval (I have a commitment with conditions letter, the only condition being approval by the USDA) using the guidelines utilized by the USDA, or their own?
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Old 07-24-2008, 10:07 AM
 
Location: Raleigh, NC
467 posts, read 1,483,492 times
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so then if I'm following you, the lender would have used USDA guidelines to issue me an approval. They then send it to the USDA for their final say. So should I anticipate the USDA would also approve, since the lender would have used USDA guidelines in the first place?
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Old 07-24-2008, 10:09 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 14,638,718 times
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Many lenders give 'conditional approvals' or 'preapprovals', but they don't all make it to closing. There are many lenders that are denying perfectly good loans because they want to take the 'cream of the crop', and be able to sell it to the investors.

Quote:
Originally Posted by Lisalrenee View Post
so then if I'm following you, the lender would have used USDA guidelines to issue me an approval. They then send it to the USDA for their final say. So should I anticipate the USDA would also approve, since the lender would have used USDA guidelines in the first place?
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Old 07-24-2008, 10:11 AM
 
Location: Raleigh, NC
467 posts, read 1,483,492 times
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is a conditional approval and a commitment letter with conditions the same thing?
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Old 07-24-2008, 10:14 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 14,638,718 times
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no.
Conditional approval means that they approved YOU, and will require more documentation to justify the information that's on the application.
Commitment letters are generally given when the borrower is approved to purchase a home, but it comes with the conditions that the home will be appraised, it's insurable, and has a clean title.

It will always be 'conditional' until the loan actually closes.

Quote:
Originally Posted by Lisalrenee View Post
is a conditional approval and a commitment letter with conditions the same thing?
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Old 07-24-2008, 10:24 AM
 
4,066 posts, read 10,826,424 times
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Quote:
Originally Posted by Lisalrenee View Post
so then if I'm following you, the lender would have used USDA guidelines to issue me an approval. They then send it to the USDA for their final say. So should I anticipate the USDA would also approve, since the lender would have used USDA guidelines in the first place?

All USDA loans are manually underwritten, which means you don't have any type of approval until the USDA underwriters go through it. Now a good lender will know what the guidelines are and will have a feeling of 'slam dunk/no problem', 'should work', 'borderline', or 'doubtful'. If he issued you a pre-approval for this loan type before underwriting and he is a good lender than you should be in the 'slam dunk' catagory.

These loans differ from others, because on other loan types we can get an automated underwriting approval (computer generated) before we actually send anything in to an actual underwriter.
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Old 07-24-2008, 10:43 AM
 
3,583 posts, read 9,575,865 times
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Quote:
Originally Posted by renriq02 View Post
Many lenders give 'conditional approvals' or 'preapprovals', but they don't all make it to closing. There are many lenders that are denying perfectly good loans because they want to take the 'cream of the crop', and be able to sell it to the investors.
I guess my question then would be, is a preapproval worth anything? Based on your experience Renriq02, what percentage of preapprovals would you say never make it to a closing? Is it a high number?
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