USDA Home Loan Credit Qualifications in NC

April 15, 2011 by 1 Comment

Good News!  You do NOT need perfect credit to qualify for a USDA Home Loan!  Whew!  This 100% no money down program requires a MINIMUM credit score of 580 – but folks, just because you have a 580 score, doesn’t mean you can purchase. These days – we normally need a score above 620 to get the loan approved by Underwriters.

If you are NEW to the Credit game, meaning you are recently out of school and don’t have any BAD credit, you just don’t have a TON of credit – we can probably get a 620 score approved. In general, you need 3 different trade lines with 12 months of payment history.  Equifax will verify your rental payments (assuming the lease was in your name) and calculate that as a trade line, the other 2 credit repositories will not.

Here are some guidelines on what USDA Home Loan Underwriters will NOT take:

  • Foreclosure within the last 36 months.
  • Bankruptcy within the last 36 months
  • More than one 30 day late in the past 12 months
  • Outstanding Judgments in the past 12 months
  • Two or More missed rent payments within the last 24 months
  • Chapter 13 Bankruptcy – Case by Case review
  • Delinquent tax liens
  • Delinquent student loans

If you are in the market for a new home, and you want to know if your credit will qualify you for a 100%, no money down mortgage loan with USDA Rural Development Mortgage Loan, call Steve and Eleanor Thorne – 919-694-5058 we are NC’s USDA Home Loan Experts!

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USDA Home Loan PMI Will Change 10/1/11

April 14, 2011 by Leave a Comment

If you are looking for a USDA Home Loan in North Carolina – you might want to do it before the end of September!  More Rule Changes! Okay, so you don’t HAVE to buy before October 1st.  It’s not like the 100% no money down program is going away – it’s just changing the way the PMI (which they call Guarantee Fee) is being charged.  Starting at the end of September, the  USDA Rural Guaranteed Loans will have an annual fee that is collected on a monthly basis. The upfront fee will be coming down as the guarantee fee is changed.

Currently, the guarantee fee for this loan is 3.5% of the loan amount which includes the guarantee fee, so it actually works out to about 3.63% of the net loan. If you are into algebra, the equation for that would be purchase price/.965-purchase price=guarantee fee.

The new PMI/guarantee fee will be 1% of the total loan amount plus a .3% annual fee. The calculations on this fee are a lot more complicated because it is calculated on the average yearly principal balance.   So, to do a simple back of the napkin calculation of what it will cost think about this:

$100,000 loan amount – add 1% for the upfront PMI fee.  So your monthly Principal and Interest payments are based upon $101,000.

On a monthly basis, you will be paying $25 a month for that original $100,000 loan during the first year… as your balance goes down, the amount you will be paying will diminish as well!

This will put USDA mortgage loans more in line with other low down payment programs.  However,  USDA Home Loans will still compare much better than FHA or Conventional loans due to the fact that the annual guarantee amount (the monthly payment) will be so low, and will be diminishing each year. In comparison,  FHA loans require a 3.5% down payment, and have an annual PMI (mortgage insurance) rate of .9%, three times what the guarantee fee will be with USDA home loans on a 100% down program.

If you have questions about USDA Home Loan Qualifications, Credit Score Requirements, or want to know what Counties Qualify for this program in North Carolina, Call Steve and Eleanor Thorne, NC’s USDA Home Loan Experts!  919-649-5058

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USDA Rural Development Switching Underwriters

July 12, 2010 by 2 Comments

USDA Rural Development Single Family Housing announced some consolidation and changes regarding WHERE files are going to be processed.

No matter who originates a USDA home loan, it is re-underwritten (or processed) through a local USDA office. In the past, loans for Wake County went to Wake, Johnston County went to Sanford and Franklin County went to Franklin County.

So, there will be an underwriter, or processor out there who in the next couple of weeks, won’t realize there’s been a change… will be going too fast without updating their rolodex, and they will ship a file off to the wrong place.  I can guarantee it.

If you are considering a USDA home loan for your purchase in NC, look at the following list of where files are being processed for your county.  Ask your loan officer… then call Steve Thone,Mortgage Banker in Cary , 919-649-5058.  We love USDA home loans!

In today’s announcement, USDA will be underwriting for Guaranteed Processing as follows:

Asheville Office -
Buncombe,Henderson,Madison,McDowell, Mitchell, Transylvania, Yancey County
Murphy Office
Cherokee, Clay, Graham, Haywood, Jackson, Macon, Swain
Shelby Sub Office
Cleveland, Gaston, Lincoln, Polk, Rutherford
Winston-Salem Office
Catawba, Forsyth, Iredell, Stokes,Surry, Yadkin
Jefferson Area Office
Alexander, Alleghany, Ashe, Avery,Burke, Caldwell, Watauga, Wilkes
Henderson Area Office
Alamance, Caswell, Durham, Granville, Orange, Person, Vance
Lumberton Area Office
Bladen, Brunswick, Columbus, Cumberland, Hoke, New Hanover, Pender, Robeson, Scotland
Greenville Area Office
Beaufort, Bertie, Camden, Chowan, Currituck, Dare, Gates, Hertford, Hyde, Martin, Northampton, Pasquotank, Perquimans, Pitt, Tyrrell, Washington
Asheboro Area Office
Cabarrus, Davidson, Davie, Guilford, Mecklenburg, Montgomery, Randolph, Rockingham, Rowan, Stanley, Union
Sanford Office
Chatham, Edgecombe, Harnett, Johnston, Lee, Nash, Wake, Wilson
Kinston Area Office
Carteret, Craven, Duplin, Greene, Jones, Lenoir, Onslow, Pamlico, Sampson, Wayne
Halifax Office
Franklin, Halifax, Warren
Rockingham Office
Anson, Moore, Richmond

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