USDA Loan Program vs FHA Loan Program (loan officer, approval, credit)

[sonny4u2c]

My daughter is in the process of purchasing a new town home in Brandywine, MD. The property she is purchasing is eligible for the USDA Loan Program. The home will cost her about $260,000. The bottom line to this story is this: She was given a loan approval to purchase the new home under the FHA Loan Program but not the USDA Loan Program. When we ask why she wasn't eligible for the USDA Loan Program, we were told that it was a debt to income issue. The loan is being process through KHovanian Homes. Can anyone offer any clarification..............you would think it would be more difficult to get a loan approval (because of debt to income ratio) with the FHA Loan Program rather then the USDA Loan Program.......Thanks,

Ernie

[marmac]

Seeing USDA ( United States Dept of Agriculture ) financing townhomes tells me something is screwed up in our government !

[dad2jules]

USDA has maximum income limitations and FHA does not. This could be what the issue is.

[seeniorita]

Debt to income ratio requirements do vary between loan programs & types. Actually, FHA is much more "flexible" with debt/income ratio than most others.

[sonny4u2c]

dad2jules...............I'm not sure if you received my last post so I will state it again. My daughter who is single does meet USDA income limits and she has very little debt. So we are "puzzled" as to why she can get a loan approval for FHA and not USDA. The loan agent herself wasn't clear regarding this situation. For example, initially we were told that she did obtain tentative loan approval for a FHA loan and later when we discovered that the new property she is purchasing is eligible for the USDA Loan Program, she informed us that because she was already eligible for the FHA loan, she wouldn't have any problem being eligible for USDA Loan

[seeniorita]

If you daughter meets all of the parameters of both programs, I would question the loan officer and ask for proof of the debt/income variables they are using. As a consumer, you are entitled to know which option works the best.

[sonny4u2c]

Thanks Seenorita, I believe this is the route we should take.........we still have time to sort this out. Her new home is scheduled to be completed prior to Nov 30th 2009........hopefully in time for the $8000.00 tax credit....Ernie

[seeniorita]

Originally Posted by sonny4u2c

Thanks Seenorita, I believe this is the route we should take.........we still have time to sort this out. Her new home is scheduled to be completed prior to Nov 30th 2009........hopefully in time for the $8000.00 tax credit....Ernie

Stay on top of the building process. I work in new construction and small things can come up at the last minute to delay a closing and 11/30 is cutting it close! Good luck!

[pburgess68]

You may want to do some research here... Individual and Family Opportunities
If your daughter makes too much $$, that could be another reason.