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I'm a realtor and mortgage broker and got a loan where I'm only rep'n the seller & the deal's been extended 4 times because of the loan---which is a USDA ---which I've never done---know they been here forever but I always looked at them as being either rural farm loans or business loans. Anybody done one or familiar with them?
USDA is technically a "rural" property loan.... but the term rural is used very loosely. Almost any property outside of large cities and suburbs is elligible. Even many small cities 15-20 miles outside of large metro areas are acceptable. There is a USDA online tool you can use to look up if an area is acceptable: http://eligibility.sc.egov.usda.gov/...lcomeAction.do
It is similiar to FHA/VA, more like VA than anything. 100% financing, a 2% upfront MI fee that is rolled into the loan and no monthly mortgage insurance. Unlike VA/FHA there are income limits that vary depending on the location and the # of people in the household.
The problem with them is that for most lenders, they must first manually underwrite the entire loan. After they approve it, they ship the whole thing to USDA that then underwrites it again before it can close. There are very few lenders that have access to the GUS system which is like AUS (DO and LP) but only for USDA loans. It saves a little time in the process but it is still typically more time consuming. As it depends on property location you can not run it with TBD Street, you have to wait until you have a home under contract.
A good lender with experience can pre-approve someone accurately and help in the process. Someone that jumped onto the FHA/USDA/VA bandwagon last week because its the "new subprime" and learning as they go along, good luck.
Thanks man; I just got back from a 2-week vacation, so I just happened to check on this. I think you're right about the "new subprime" and add ALT A to it; because I really don't see the lenders making anything but A paper loans right now.
A paper conforming loans and government loans are about the only things moving. There are still a few options for A- or BC options. Most have returned to the niche that they were... you needed assets/downpayment to compensate for lower credit or lack of income. You also pay for it in points and the interest rate. The high downpayment adds to the lenders security and the high interest rate makes the risks worth it.
The problem we had wasn't only that risky loans were done, its that they were done at cheap prices. So there was no room for reward for those that took on the risk... as soon as the risks were realized the value of the bonds plummetted.
Yeah, and now that paper---that huge number of bonds made with that paper---appear to be next to worthless and one only wonders what MIGHT have happened---worldwide---if Fannie & Freddie hadn't of been bailed out. By the way---does anyone know of any lenders who are doing USDA loans---besides Taylor, Bean & Whitaker---who I'm presently using---but they are slow with a capital S.
Yeah, and now that paper---that huge number of bonds made with that paper---appear to be next to worthless and one only wonders what MIGHT have happened---worldwide---if Fannie & Freddie hadn't of been bailed out. By the way---does anyone know of any lenders who are doing USDA loans---besides Taylor, Bean & Whitaker---who I'm presently using---but they are slow with a capital S.
Keith G.
Me
Other than that, SunTrust and Chase both do it fairly well. I actually haven't done any with TBW because they are generally slow, although they have a good team and decent pricing.
well i knew of USDA, but never got an opportunity to know more about it. i didnt knew that it has so many advantages. thanx to rcarrillo
Sure thing, the information is always free.... at least on here
The main things to look at are income/location. That website I posted will let anyone see if they meet those two requirements. The rest of the process is very similiar to FHA. There are pros/cons with FHA though.
USDA: 0% down; 2% upfront MI charge, no monthly MI
FHA: 3.5% down (as of 10/1); 1.5% upfront MI charge, .5%/12 monthly MI
FHA rates are generally a little lower (which takes out some of the sting of that monthly MI) and the upfront charge is less as well. Both allow the seller to contribute the same amount towards closing costs and the fees are about the same. FHA also does not have any income or area restrictions, just max loan amount allowed per county.
Really USDA benefits when someone wants 100% financing. Otherwise the "financial" benfit is almost neglible and fades away the longer someone owns the home. USDA often takes longer to process as well... so keep that in mind.
If it wasn't for the 0% down USDA wouldn't be hyped as much.... most people would stick to FHA.
I am just learning about this USDA program. We currently do FHA, so I was wondering, is there another type of license I need to have in order to do USDA, or just as long as I am signed up with a lender that offers it?
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that have access to the GUS system which is like AUS (DO and LP) but only for USDA loans. It saves a little time in the process but it is still typically more time consuming. As it depends on property location you can not run it with TBD Street, you have to wait until you have a home under contract. 
Re:what is a USDA loan
