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I get the impression from my current broker that the USDA guidelines are pretty straightforward. I was quickly pre-approved for a mortgage with another broker a few months ago. I don't know if when I actually gave him an address of a potential home to work with and the more formal underwriting process began, whether there would have been a snag. He said it looked like it would easily go through.
The house I made an offer on wasn't accepted and that broker changed mortgage companies and now doesn't do loans in my state so I went to a new broker.
It has been about a week and he's still saying "waiting to hear from Fannie Mae underwriting" regarding an item on my credit report. My report and score are better than they were when I was "pre-approved" months ago. If his underwriters say no, is it going to do any good to find another broker, or will underwriting guidelines for USDA loans generally be the same?
The USDA underwriting is seperate from the banks underwriting. Generally the banks will follow the USDA guidelines and then add their own stipulations and requirements on top of that. While the USDA is guaranteeing the loan, it is still ultimately the bank that is giving you the money.
So, it is possible that Bank A would consider you to risky to lend to and Bank B would be willing to grant you credit. After you pass the banks underwriting and it is passed on to USDA, they will do their underwriting. Generally, you won't get past the bank stage at all unless there is a solid chance that USDA will approve as banks tend to use the USDA guidelines as the minimum.
So when a broker says he's still waiting on Fannie Mae underwriting, is he still talking to his bank's underwriters, or has it been passed to the USDA? I would think it wouldn't be passed to the USDA until I have an actual address of a house I want a mortgage for.
Correct, he is still working with the banks underwriters. USDA won't see the loan (on a guaranteed loan, direct is a different story) until you have selected the property, had an offer accepted and put to contract and then applied for the mortgage with the bank and then passed the banks underwriting.
If it is an item on your credit report that is holding things up, and you don't get approved, then do go to another lender. For something like this what one will deny another one will approve.
They just have to make sure that the loan makes sense and that you will make your payments on time.
How long should I wait? Its heading toward 2 weeks now, haven't heard from the broker since the beginning of the week so I assume he can't get it done and I need to find someone with different underwriters. I do hate that I will take a hit to my report to have yet another broker pull my reports.
My experience about credit report "hits" are as follows.
Your credit scores don't suffer from more than one "hit" if your credit is run within 14 days for any "like product" ie this lets you shop for a car or mortgage etc and not be worried about it hurting your credit. It just shows that you are shopping around.
Your score won't go down for 29 days after the first credit run in any case. This is so that if your credit is run again in less than a month, that new credit reporting agency will show the same scores as the first one.
Of course, this is perfect world stuff, in that your Utilization can not have changed etc.
I took a class a while back that was not on credit repair, but how the bureaus come up with their scores. Each one's algorithms are unique and proprietary (secret) so it did not explain that if a persons history reflects such and such their score will be x, but did give a lot of back ground information on the basics.
So I want to make sure I understand... if I find a new broker and they pull my report, it has to be within 14 days of the first one (which I think we're at about 12 days right now), or within 30 days?
Do you have a property? If so, you need to LEAN ON YOUR LENDER, now.
This is the message lenders are currently receiving:
This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010.
Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds.” This is because it is not certain when additional funding will be available.
Limited funding may become available for disaster areas declared in 2008, or in disaster areas declared for Hurricanes Katrina and Rita. Limited funding may also become available as prior Agency commitments are de-obligated, however, such funding will be very limited.
We apologize for any inconvenience this may cause you. Should you have any questions, you may contact the Single Family Housing Guaranteed Loan Division at (202)720-1452.
NOTE: We are seeing registration opportunities shut down, as you will need a commitment (meaning a specific property) to be guaranteed a reseravation.
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