There’s good news, and bad news concerning USDA Home Loans in NC. First the Bad News: USDA Map changes scheduled to go into effect on February 1, 2015 made some parts of the state ineligible for the program, but mostly it’s NEIGHBORHOODS, not whole cities that lost access to the program . The GOOD NEWS? Anyone trying to get a USDA Home Loan is having a much QUICKER time, with fewer underwriting delays!
The USDA Map Changes in NC are massive. More than 100 neighborhoods and communities in the state of North Carolina lost the ability to offer USDA Home Loans. Since we “get rural fast” here in NC, that’s pretty significant. BUT, the changes where not as WHOLESALE as they first told us to expect, so we’re breathing a sigh of relief, until October, when they are scheduled to “tighten up” some more.
Because these map changes are so radical, many first time home buyers are deciding to go ahead and buy this spring, and we are seeing homes with MULTIPLE offers coming in. Although the USDA Home Loan Program is NOT just for First Time Home Buyers, this is the part of the market we are seeing really take advantage of the program! Because of that “rush” of people wanting to use the program, we know the delays in getting files underwritten are coming too. To head off some of that frustration, we figured we’d explain the USDA Home Loan Underwriting process.
USDA Home Loans That Are Underwritten FOUR TIMES!
This is the USDA Home Loan Underwriting process for all lenders, it’s not like the Bank is just doing it this way.
Let’s say you are using the MCC Credit offered through NCHFA, and you are getting a USDA Home Loan. First your loan is sent through the Automated Underwriting System for USDA called GUS. That system gives us the first set of Underwriting “stipulations” or requests.
Once we have all of those items from you – then we send all of that documentation to our Bank Underwriter to review. Depending on what they think when they look at your file, they could ask us for another set of documentation.
From there, your loan is sent to USDA Home Loan Office, where another Underwriter looks at the file – and gives us a list of documentation THEY would like to see for clarification. Remember, with all of the Housing Crisis, the Underwriter’s information and the Loan Officers information are now ON THE DEED OF TRUST. This means that if you go into foreclosure later – they will track it back to the Loan Officer and Underwriter. Because of that, Underwriters are each a little more “picky” than the LAST one!
If you are getting an MCC Credit or using a Grant to cover part of your closing costs, then your loan goes to NC Housing, for their underwriters to look at the file. Again, the Bank’s Underwriter looked at the documents, the Automated System did a review of the numbers, the USDA Underwriter looked at the file and now the FOURTH person is looking at the file.
Through this process, it is likely that we could ask you for documentation 6 or 7 times. That is frustrating. We know that... and we apologize for this hassle upfront… there’s very little we can do about it. (but we’ve put together this list of 7 things you can do to help get things looked at Faster!)
The truth is that we take harder cases.
Many of our clients are folks who had some credit problems that we’ve been helping them fix. Some of our clients get gift funds, and we have to “over” document where that money came from. Some of our clients are divorced, and don’t have all of the documents we need to prove that they get child support on a regular basis.
We help borrowers document this the best we can, but these unique situations mean that an Underwriter is going to take extra caution when approving your loan.
In March of 2015, it’s currently taking almost 2 weeks for a loan to get fully underwritten by the Bank, USDA Home Loan Underwriters and NC Housing in NC. We understand that it’s a good 15 days in neighboring SC and Virginia.
Bottom line? If the loan officer calls and asks for documentation – don’t HESITATE. Get the documents back to us as QUICKLY as possible! Remember to explain this to your Real Estate Agent, or the Seller – who wants to know WHY it is taking so long for you to get approved!
Looking for a USDA Home Loan, or a House that qualifies for USDA?
If you are a first time home buyer looking for low cash out of pocket ways to buy a house – and for whatever reason, the folks you just talked to said you’ll never be able to get a mortgage the way you want to… call us. We know all of the programs, we do USDA Home Loans, NC Housing Financing, FHA, Veteran’s Home Loans – the whole gambit. We can help, and we’ll give you straight up answers. Steve and Eleanor Thorne, 919 649 5058, we have the best rates – and we know the mortgage business!