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I entered into contract to buy a home on April 15. Had the inspection, then was just told my USDA loan is not going to go through. I figured I'd just throw in the towel and am about to sign the rescission papers. But if instead I were to start the process for a FHA loan and it went through, would my current contract still "count" as being prior to April 30 for the tax credit?
Does anyone have any personal knowledge of FHA being easier to qualify than USDA? I had a very old chargeoff come out of the woodwork and I wonder if FHA would be any more likely to overlook it. Otherwise, its due to drop off my reports in a couple of months and I could put off house buying until then.
It would depend on the terms of your contract and if the seller was willing to extend the contract until you secured new lending. If you have an agent, I would discuss it with them and see what your options are under the contract.
If it is just a matter of extending the closing date, as long as your contract stays fully executed (not terminated) then you should still qualify for the tax credit as long as you close by 6/30.
USDA and FHA are the same guidelines, for both appraisals and credit underwriting. There should be no difference. Most contracts allow for the buyer to seek alternate financing, as long as there is no financial impact to the seller. Search your contract for this or a similar statement. I would think (because I am not a lawyer or a CPA) that your contract would still meet the tax credit criteria as long as you close by June 30.
USDA and FHA are the same guidelines, for both appraisals and credit underwriting. There should be no difference. Most contracts allow for the buyer to seek alternate financing, as long as there is no financial impact to the seller. Search your contract for this or a similar statement. I would think (because I am not a lawyer or a CPA) that your contract would still meet the tax credit criteria as long as you close by June 30.
Aren't all USDA loans manually underwritten using 30/40 DTI ratios? I haven't done one in 3 years, but that is how they were done when I did them. If so, the credit underwriting can be much more liberal with automated underwriting.
There is one major player that doesn't submit to USDA prior to closing. And even so, most investors have implemented a minimum credit score (which USDA does not) and also require a DU approval, not caring what USDA will or won't do. When we had two sources to go to, we were told DU/Accept - we could go below 620, but the add-ons were heavy.
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