Most loan officers are not familiar with the USDA Home Loan Program – which is a shame, because it’s one of the best No Money Down Home Loans available in NC!
We get “Rural” really fast in NC… one minute you’re in a neighborhood – the next you can wake up to the sound of Roosters!
If you’re interested in living in a home with a larger lot – and a little less “Urban” this might be the program for you!
The program’s full name is the USDA Rural Development Guaranteed Housing Loan program. Most people call them “USDA loans” or “USDA RD Loans”. USDA home loans NC are insured by the U.S. Department of Agriculture.
The USDA’s loan’s biggest feature is that it is a No Money Down Home Loan! That’s right, if you qualify – this is a 100% mortgage loan.
USDA home loans are the same as most other mortgages in that they don’t have “crazy payback schedules” or come with prepayment penalties. Because these loans are backed by the government of The United States, there are some “quirks” to it.
Is the USDA loan program limited to first-time buyers?
No, the USDA Rural Housing Program can be used by first-time buyers and repeat buyers. We’ve done several loans for folks who currently have a house (in Tennessee for instance) and get transferred to NC – meaning that when they buy in NC… they’ll have 2 houses. There are some ways for this to work.
What is the USDA Loan Eligibility Map?
To purchase a home with the USDA Home Loan program, the property must be located within the USDA Home Loan Eligibility Map “footprint.” Meaning it must be “officially” located within an area that USDA says is “rural.”
The USDA Home Loan Eligibility Maps are changing in North Carolina on December 1, 2014. Assuming Congress doesn’t stop this change – over 1/3 of North Carolina will no longer be eligible for USDA Home Loan financing. Your loan must be APPROVED by USDA Home Loan Underwriters prior to December 1, 2014 if you want to purchase a home in an area that is subject to this change.
What types of mortgage loans are available with a USDA mortgage?
The USDA / Rural Housing Program offers 30-year fixed rate mortgages only. These are NOT for Construction Loans – There is no 15-year fixed rate mortgage. There are no adjustable-rate mortgages. 30-year fixed only.
What is the USDA home loan program’s minimum down payment?
USDA Home Loans have no down payment requirement. You can finance over 100% of the property value with a USDA loan (They let you finance the USDA PMI premium).
How are Student Loans Treated when Qualifying for a USDA Loan?
Student loans come in two classes: deferred and not deferred. And one thing to keep in mind when looking at the USDA Home Loan Program is that it does treat student loans differently than the other home loan programs available. USDA Home Loan Underwriters count a payment – even if it’s deferred. If it’s deferred as an income base loan (meaning the payment on your student loan changes annually) they count $100.
Can I finance the Upfront USDA PMI into my mortgage?
Yep. The upfront PMI that USDA charges on loans (called Upfront Mortgage Insurance or Guarantee Fee) can be included in the loan. This means that if you are purchasing a $100,000 home in Raleigh, the loan will be $102,000; OR, you can pay the 2% out of your pocket… or see if you can get the Seller to pay it. We are NOT seeing many situations where the Seller is doing this, but if you have extra funds, you can go ahead and pay this off. Like FHA, the Guarantee Fee (or Mortgage Insurance Fee) is not refundable.
There’s also an annual USDA PMI fee charged at a rate of .4%. To calculate that – you take your total loan amount, so the amount you are paying for the home, let’s say it’s $200,000, plus the 2% for the Upfront USDA PMI which would be $4000. So, in this case, $204,000 times .4%. That equals $816, which is the annual USDA PMI fee. Divide that by 12, and the monthly USDA PMI charge is $86.
How much are the closing costs for a USDA mortgage?
Closing costs vary by Investor (or Bank we sell your loan to) and location. In general, we are seeing more NC Home Buyers who are asking the Seller to pay the Closing Costs (we can help you structure that).
Can the seller pay my closing costs on a USDA Loan?
Yes, the USDA Home Loan Program allows sellers to pay closing costs for buyers. The Seller can cover your Attorney fees, Appraisal, Title transfer fees, and other charges related to obtaining your mortgage. In most cases, the borrower is responsible for their portion of the taxes and their Home Owners Insurance. In the cases where someone is “tight” on their cash – we generally package in a credit (from us) that will cover most of those buyer related costs… meaning you can usually get into a home with a USDA Home Loan in NC with less than $750 out of pocket.
Can I get a gift for my closing costs?
Yes, USDA loans allow gifts from family members and non-family members. You will need a gift letter to accompany your loan application. We can help you coordinate this (it’s not too hard). You also may be able to get a 3% grant from NC Housing.
Can I use the USDA home loan program for my working farm?
No, the USDA home loan Program in North Carolina is for residential property. There are some situations, however when we can help you use the program to purchase a horse farm.
There was a recent change in the way USDA Home Loan Underwriters were instructed to look at Outbuildings. In a clarification, USDA stated that outbuildings that have some functionality, maybe you want a place for your riding lawn mower, do not have to be considered “farm service” IF the land the house is own is not income producing, and it’s typical for homes in that area to have structures like that.
Can I use the USDA home loan program for a vacation home or Investment Property?
No, the USDA Home Loan Program is for primary residences only.
Is there a minimum credit score for the USDA loan program?
Most Banks currently look for a 640 credit score. This is the number that GUS (the automated system) requires. The NCHFA program recently changed, and it now also requires a 640 credit score for USDA Home Loans in NC.
Having said that, our Bank WILL do a manual underwrite and get a loan approved with a score of 620.
I recently got out of college and don’t have 2 years of work history. How long until I am USDA-eligible?
As a recent college grad, we are going to count your college “time” as part of your two year work history – assuming you get a job that is somewhat related to the field you were studying. If you are a W-2 employee, you are eligible for USDA financing immediately; you don’t need a job history. If you have less than 2 years in a job, however, you may not be able to use your bonus, overtime or commission income to qualify. HEADS UP – we are going to need a first pay stub. So, if this is a new job, we can’t close until you receive your FIRST pay stub.
I am self-employed. Can I use the USDA home loan program?
Yes, self-employed folks can use the USDA Home Loan Program. If you are self-employed and want to use USDA financing, as with FHA and conventional financing, you will need to give us 2 years of federal tax returns to verify your self-employment income. We are also going to ask for P&L and Balance Sheets for those two years, and a current YTD P&L and Balance Sheet. Often times, the USDA Underwriters will ask that they at least be reviewed by a CPA or Accountant that is not affiliated with the Company – meaning a third-party that doesn’t work for you. Your Income Taxes must be Filed, and we must be able to get a transcript before you can close.
Can I do a “cash out” refinance with the USDA Loan program?
No, the USDA Home Loan Program is for purchases and rate-and-term refinances only.
Are USDA Home Loan mortgage interest rates good?
Yes, USDA Home Loan mortgage rates are backed by the US Government. Because of that, more banks are interested in having them, and the mortgage rates are usually lower than Conventional Loans. Additionally, because the USDA PMI rates are so much lower, USDA home loans are usually much cheaper than the FHA programs!
If you are considering a USDA no money down home loan, call Steve and Eleanor Thorne 919-649-5058. We can help you find out if your income qualifies for the program in your county – and if the property you have your heart set on is within the USDA Footprint!
USDA Home Loan Guidelines for NC changed October 1, 2014. These changes are particularly significant for folks with “lower” credit scores.
Can a USDA home have a shared drive or a shared well ?
I would need more details on this to be able to answer it properly. In general, there would need to be a recorded access just like a private road maintenance agreement – but the water supply would also need to be proven to be adequate for both households.
Do USDA Loans cover homes that have a spring water source.
Yes – If there’s a Working Well, you should be fine. You can call us at 919 649 5058, and give us “specific” details and we’ll be glad to research it for you. There are some restrictions about how far the well and septic must be from the house, the property lines and each other – so I probably need to write a post about that. I just did one on the VA requirements. Thanks for asking!
Under some circumstances we can. Especially now that folks are starting to build up Equity in their home. You are welcome to call us at 919 649 5058 Thanks 🙂
Eleanor,
I have a question. My son started the usda loan process in July around the 10 the loan officer said it went to usda on 8/15 on 9/12/2013 I got a call and wastold he had been approved and asked if Stephen could be at the lawyers office on the 13 at 11 am. Stephen could not get off on such short notice. Now they say his credit report has expired and they are going to have to rerun his credit and the process will start all over is this so. We were supposed to close on the house on the 3rd the sellers are getting irritated about this process i don’t blame them but Stephen doesn’t want to loose the house. He has gave the owners of the house $400.00 to keep it this month and will have to come up with an additional $500.00 if we don’t close by the end of the month. I feel like we are being jerked around. What do you think? Please help if it goes back to usda it could take another 30 days we dont have
Re-Running his credit is an issue that was going to have to be done anyway – they pull your credit within 72 hours of closing. This is a real problem, and unfortunately, it’s something that they should have looked at – especially when GUS was changed during the summer.
If he has charged more on his credit cards, and he was tight already – he could have an issue, of not qualifying now.
Did they do aMCC Credit? When we realized how tight GUS was now, we re-ran ALL of our loans (weather they were at USDA or not) and made sure we were not going to have a problem. That should help, and NCHFA is only taking a day to approve those deals – so you aren’t adding a ton of time to the process.
Additionally, if the Credit Report has expired – his other documents, including his Bank Statements and Paystubs may be expiring soon as well. If they are sending it back to USDA be sure those docs are updated too. If it has to go back to Housing for approval – expect at least 30 days for a new Underwrite, because yesterday, they were working off of files they received on August 20th.
Has the Loan Officer talked to you about getting a Power of Attorney so that when it’s ready to close the next time, someone else can sign for him?
I’m SURE that the Sellers are getting anxious – but they are MUCH better off waiting in this situation. If the Maps change on October 1 – they could find themselves with VERY FEW people who now qualify to buy their house.
Eleanor,
Thanks for all the information. Where would I find the MCC credit would it be on the GFE ? You also talk about October 1 this may not get back from USDA before they will it still qualify.
Karen – The loan doesn’t have to be back from USDA by October 1 – it only has to be received by USDA by that time to be under the current USDA Eligibility Maps. The MCC credit would show up in the payment on the Fee sheet and the Application (last page) as a credit. We actually type in MCC next to the credit, but most loan officers don’t – so it would likely just show a credit under “other” on the payment. Hope that helps! If you have other questions today you can always call us at 919 649 5058
I received a gift from a family member for closing cost. It was deposited as cash. Will USDA not accept cash gifts?
Eleanor,
I asked the lender about this credit and this was her response.
good morning! This is not something that is on Stephens loan. He is already at USDA so this would cause further delays. Please let me know if you have any questions and have a great day. Is this so we are in Winston Salem they are part of the Mortgage Credit Certificate (MCC) group. It sounds as if I ask for it it will delay the loan.
If you ask for it now – it will delay the loan. That’s too bad, because if he qualifies for the program, it stays on his loan for the entire time he has it. Wish we had talked earlier. Let me know if you need any additional help, or call us at 919 649 5058
They MIGHT accept cash gifts – I’ll need to know more about when it was deposited, and how much it was. There has to be a paper trail, showing that they had the ability to give you the gift. There are some ways around this – call us at 919 649 5058
Eleanore,
How long is a Home loan credit report good for.
Thanks Karen
It’s good for 90 days. A QC is done right before closing (usually within 72 hours) and the credit is re-pulled at time. The goal is for your credit to look the same at the time of closing as it was when you originally applied. Hope that helps, Karen. Call us if you need to know more 919 649 5058
Eleanore,
I know I am asking a lot of questions but I need to know the truth. His credit report was pull on May 15 for a house we had to back out of. Then we found another house and went under contract they did not re-pull his credit and sent the loan to USDA on August 15. When the package came back they tried to rush us into closing trying to say it was fixing to expire This was on September 12th. I emailed Her supervisor this was there response.
Your initial report was pulled on 5/15, this report expired on 9/12. The file was send to USDA on 8/15, so the report expired while we were waiting on their review. There was almost a month remaining before expiration when the file went to USDA. The new report was pulled on 9/17 and the file was back in line the next day. Because this is a loan which must be reviewed by USDA, there is not a lot I can do to push it. We called and were told that they received lots of similar calls, and couldn’t do for one and not another. As of right now, USDA is underwriting files that were submitted on 8/30. I hope the turn times speed up after the end of the month. Please feel free to contact me if you need any further information! (If I had known it was going to cost us $1300 we could have went FHA instead of USDA) as far as I know we cant get any of the money that has already been used back. I have looked on the USDA web site and they say they are only up to the 23rd but the supervisor said they were up to the 30th. I am get upset about the whole process.
Karen – I’m so sorry that you are having this problem. If his credit changed, between May 15th and September 17, then the loan had to go back to USDA. I’m sure the Seller is anxious – but this is the Government System. It is MUCH BETTER to go through the USDA system (as opposed to FHA) because long term, the Mortgage Insurance on a FHA Loan is much higher – it could cost you an extra $100 a month or so for the life of the loan. I’m sure you are upset, you thought he would be moving a month ago, however, this is the process for right now. The BIGGER problem will come in if Congress shuts down the Government later today. Surely that won’t happen! 🙂 If it does – however, we are all “dead in the water” until they decide on a Budget. You can call us directly if you have questions 919 649 5058. Today – USDA is working on September 4th. So at a minimum, you will have 2 weeks more before closing.
Nothing changed on his credit. I think the report expired and they didn’t re-pull it before it was sent to USDA. They are telling me this report was good until the 12th of September. When it was pulled on May 15th.
Thanks Karen
Unfortunately the USDA RD Websites are now down. I know for our company the reports are only good for 90 days.
Karen – as I understand it, what they are debating right NOW is NOT the furlough, it’s for the Debt Ceiling, which is a completely different issue. Unless they settle on a short term BUDGET deal, the USDA offices will remain closed, unfortunately. The thing they are trying to avoid right now, is us not paying our bills. If they don’t fix the debt ceiling, rates will go UP REALLY high, and Social Security Checks will not go out at the beginning of November. If they pass a CR – meaning a Continuing Resolution – then the USDA offices will open us, until that CR expires. Our guess is that it will expire on December 15th, because that’s when Congress leaves for Holiday Vacation – however, having said that, the last bill that the House sent asked for an extension only until November 15th. If they opened it back up for only like 2 weeks, then shut it right back down again – that could be even worse???
Eleanor,
On 9/17 my scores were 676,655,641 is there anyway I could go FHA instead of USDA and get Down payment assistance. The buyer has agreed to pay $3000.00 in closing cost but they are saying I need 3% down. Is there any way we could change loan officer and there not be a problem.
Karen- your credit scores certainly qualify for the FHA program. There’s also a NC Housing program available, the income limits vary per county. Call us, and we can go over other options for getting into your house. 919 649 5058
I Can’t Tell, Did The Maps Change? The USDA Page Seems To Have The Old Map, And It Says Property Will Be Assessed Once The Application Is Received. (Sorry About The Caps, Stupid Phone :/)
No – the maps will not change with a Continuing Resolution – only with an actual Farm Bill being passed.
Eleanor,
Is USDA working on loans now. I don’t see anything on the web site
Yes – and NO… USDA is working on files “manually” – but their system is not up yet, and they can’t “process” files until later next week. Gotta love Technology! I would still be mindful of when your documents are expiring. Credit Reports are only good for 90 days – ditto for Bank Statements and Paystubs.
Will Franklin, NC, be affected by the proposed eligibility changes at USDA?
Matt, here’s a list of the Communities that we know will be affected by the change, and Franklin is not on the list – We don’t see any changes for the area around Cullowhee.
https://ncfhaexpert.com/usda-loans/nc-usda-home-loan-director-says-maps-may-change-oct-2012/
Was in college past 1.5 years graduated got a job in my field happens to be self employed. Can I qualify for a USDA loan??
Rachelle – great question. The answer is “maybe” / it will depend on how long we can document income for, and what the source is. Feel free to call us at your convenience 919 649 5058 and we can tell you very quickly what we can do to help! 🙂
I submitted my loan to USDA for approval on June 20, I was scheduled to close on July 11, I haven’t heard anything aside from that they are now on June 4. Is there any way to give me an estimate as to when I will be able to close. I am currently staying with someone as our lease on the rental we were in has expired. I need to get my kids settled in as quickly as possible.
Brittany – Unfortunately, USDA Underwriters are behind. There’s nothing we know of that you can do, unless you expect the process to take 30 days. Meaning if your loan was submitted by your lender on June 20th, you will likely hear back from USDA around July 20th. I would probably add another 2 or 3 days to that number because of the 4th of July Holiday. Once you have the USDA Underwriter approval – expect it to take another 2 or 3 days to close.
A couple of things you should do now… contact your lender and find out if any of your documents are expiring. It could be that they will need an updated bank statement or paystub. DO NOT charge anything else on charge cards. DO NOT open any new charge card accounts for refrigerators (for instance). Find out WHEN your rate expires – and find out what happens if you close after the expiration. Also, remember that they are going to pull another copy of your credit report 72 to 48 hours before closing. So try as hard as you can to keep your credit “profile” looking exactly like it did originally.
GOOD LUCK! It’s only a few more weeks!
If I qualify for a USDA loan, can I use it for a portion of the purchase price if the seller is willing to finance the rest? For example, if I am approved for 120,000 do I have to purchase a property that costs 120,000 or less, or can I ask a seller about financing the balance of a property that are listed for more?
No, the Seller is not allowed to take a Secondary Mortgage Position on the type of financing you are describing for USDA. Let’s say the Seller has the house listed at $150,000 and you finance $120,000 through USDA – even if the Seller sold it to you for $120,000 – there would be questions, because the Appraiser would note that it had been listed for $30,000 more.
Hi,I have a question. My husband and I got approved for a loan with the usda,well we found a home.its a 2 story brick home and it was built in 1945 but it was taking care of. Would the usda still give us approval to buy it and if not can I know why?
Cassandra, unless there’s still lead based paint in the home, I don’t know why USDA Home Loans would not work for a property. Now, having said that, I’ve seen homes that would not work because (literally) you had to go outside to get to the bedrooms on the second floor… functional obsolescence like that will not work with USDA Home Loans. You can always call us at 919 649 5058 and we will be glad to give you our 2 cents on what you are looking at.
I just called and they said they couldn’t qualify us due to the fact that my husband technically gets paid commission and has not been there for two years. We just moved down to Florida almost two months ago though so how can they expect anyone to have two years worth of w-2’s? Is there anyway to get around this because we just moved?
USDA really doesn’t offer you many options. They also don’t want to do a loan for someone who has been out of work for more than 9 months consecutively. However, there is a FHA Loan that might work for you. It allows for a non-occupying co-borrower. For more details you can call us at 919 649 5058.
My file is at USDA now they requested some info which my lo sent right back. How long will it take to get a answer or will I be put at the bottom of the pilr
It honestly depends on the Underwriter. The USDA Underwriting Offices closed from 11/21 through 12/1. There’s a change to some documents required, and if your file is not seen this week – it will likely be at the bottom of the pile. Sorry.
Hi Eleanor, I have sort of a confusing question. We live in NY and wish to buy a home in NC. My husband receives SS and a little from the VA, basically his income is around 1250.00 a month. We want to buy a house with our son who is working in NY. He would occupy the residence, but will need to find a job in NC, his company doesn’t have anything down there. His income right now is around 2400.00 a month. What would you consider our best option for obtaining a mortgage in NC? Mind you, we aren’t looking for something very expensive. Thank you!
We talked with you, but the answer of course is that this is fine. Your son will need to continue working in NY until you are settled here, and then begin the job hunt here – or he can secure a job in NC, receive his first 30 days of pay checks, and then you guys can close on a home in NC! WELCOME to our state!
Thank you Eleanor, and Steve too!!! We look forward to our move to your wonderful state!
Hello Eleanor,
I have a guaranteed USDA loan and have had it for almost a year. I am wondering if it is ok if I start making more money now or does it matter now?
Thank you for your help!
Oh Christina, that’s a GREAT question! You can work towards making as much money as you can RIGHT NOW. Even if you have an MCC (mortgage tax credit) you should be fine! Happy 2015! Good Luck!
A buyer for my seller’s property is getting the USDA 520 loan, but the appraisal didn’t come back high enough to include the repairs that were approved to be financed after closing. If my seller agrees to lower the price so the buyer can get the house (with future repairs) under the appraised value, can the buyer terminate the current contract then put another contract down on the same property with all the changes, and not have to go through the entire USDA process all over again? And could the closing either still occur by the originally scheduled end-of-Jan. 2015 date, or would it need to be extended, or could it be extended if need be? The termination is needed (versus a contract amendment), because this seller must terminate the contract on a house she was going to purchase, because she now can’t afford it, and the only way to get her earnest money back on her contingency-sale purchase is to provide termination documentation from her buyer.
Hi Eleanor,
I just had a quick question. I am a recent college grad as of May 2014 but I haven’t found a job in my field yet and only one of my credit scores are above 640. Should I apply for USDA and work towards my credit score and a job, or work towards a job and my credit first and then apply for USDA? I don’t want to wait until its to late to use my college time as my two year work history.
Kim! Call us 919 649 5058 – you don’t have to wait 2 years for a work history, depending on what you’re doing now. USDA Loans are tougher to qualify for, but it sounds like you would qualify for other 100% Grant based programs currently available in NC. Congratulations! You could be buying a house in 2015
You will need to extend. The appraisal will need to be reviewed. In North Carolina the USDA Home Loan Guaranteed office is reviewing files on an approximate 9 business day basis.
Eleanor,
Me and my husband were gifted an acre of land from his parents and we have already been pre-approved for a usda loan to build a modular home on the property. We are very confused as to what role the value of the land will play in the whole loan process. we were aware going in that if we were to get approved for a traditional loan we could use the land as a down payment to lower the amount we needed to borrow, but now that we are approved to do a usda loan based on the location of our property, we do not have to have a downpayment. i tried to ask our sales person (i know i need to ask our lender) and he just said that it would just show as equity in the property and not do anything for lowering the loan amount. I cannot seem to find an answer anywhere when researching this online, i was hoping you might be able to shed some light. It would be awesome if the value of the land could help us lower the amount of loan needed!
Thank you!
How long have you owned the land? Unless it’s been quite some time -it will not help:( I apologize for the delay in answering, our site got hacked!!
Hi, I sold my house 2 and half years ago and having been renting ever since. I am wanting to buy a home at this time however, since it hasn’t been three years since I sold my home is there a way I can still qualify for the MCC credit without waiting the full three years?
Thank you!
Anita – you can go ahead and talk to us, get prequalified, and find out what you need to know about your next home – however, we can not close prior to the 36 month mark. Call us! 919 649 5058
Does the entrance on a usda house goes up every year my grandmother has the 30 year plan,so i know so much goes on the principle she started off paying $1 sumthing now its $4 something,,so if she has 13 years to pay off before the raise shouldnt it be lesser.,what if she pays the amount that will take 13 years for then will the house be paid off example 60,000
So the interest on a USDA Home Loan stays the same for the loan the whole time you have it. It’ a 30 year, fixed rate mortgage.
You can get an exact “schedule” of how much of her payments each month are going to pay the balance of the loan down, and how much is going towards paying Interest, and how much is going to pay towards homeowner’s insurance (the kind that protects against fire, and major plumbing leaks, that kind of thing) and taxes. Depending on when she took her loan on her house out – she could be paying a monthly fee for Mortgaeg Insurance (or a kind of PMI) that is called an Annual Guarantee Fee. This monthly fee is going to insure the Bank in case she stops making her payments.
The schedule YOU are looking for is called an Amortization Schedule. The folks she is making her payments to can easily pull that schedule up and send it to her.
You are right, the amount you pay “down” on a mortgage, in the beginning, is less than the last 10 years of a mortgage. You can click show Amortization Schedule on this page and see an example. If you have more questions, you can always call us at 919 649 5058.
Hello,
What are the specifications in Carteret countywide wells. I need to know the distance between well and septic and well and drain field. We have an older home. Also, is there a waiver if they aren’t far enough apart?
USDA Home Loan Underwriters and Appraisers are looking to follow the FHA Guidelines which are outlined here. You would need to contact the Health Department in Carteret County to get a waiver – USDA doesn’t issue those. They are going to follow the County (at least that’s our understanding and what we’ve seen). We do a ton of USDA Home Loans in NC, and would be glad to help! 919 649 5058
I have a USDA mortgage loan on a home with 3 acres in Joshua Tree Ca. Ive made my mortgage payments early most months even making a double payment the first month to qualify for the 10 years off the life of the loan deal if you make a double payment within the first year they take 10 years off the life of the loan. My question is I’ve had the loan for over a year and want to sell. I’ve done significant upgrades new redwood fence, new carpet, paint ect. Is it possible to sell for more then what the original price I bought the house for. The property value has gone up around me and if so does USDA allow you to profit from the sale or is their a minimum number of years you must occupy? Please help.
Thank you for your response in advance. All of your answers are informative. I searched and couldn’t find my answer.
Jim – yes, USDA will allow you to profit on the home.
I want to make certain you and I understand how the extra payment works. When you make a 13th payment EACH YEAR then that payment amount goes directly to pay the principal balance down. So simply making ONE extra payment is only going to pay the balance down by that amount. If your monthly payment is $750, and you make an extra payment that year, then the extra payment pays your principal balance down(the amount you owe on the house) by $750.
If you make a 13th payment each year, you will pay your mortgage off in about 17 to 20 years, as opposed to the 30 year mortgage most people have.
Hi my boyfriend and I are looking to apply for a guaranteed rural home loan. I am currently not working but my boyfriend just graduated college this year and is now working as an engineer but of course he doesn’t have 2 years work. Also his credit score is 560 and mine is 696 so when it comes to applying are they going to take my credit in account as well? And if we are approved what if I do get a job and start making money? Sorry for all of the questions! I may even have more after this! Thank you!
Alexis – your boyfriend doesn’t need 2 years of work history, assuming that his job is in the same line of work that his college degree is in. He needs to raise his scores. The quickest way to do that may be to add a secured credit card or 2. It will probably take 6 months. I haven’t seen his credit report (of course) so I’m just going off of other credit scores I’ve seen, and the USDA Home loan guidelines. They will not take your score into consideration, as you don’t have income. If you get a job, after he is approved, they will look to see if your income is putting them over the income limits for the area you are purchasing in. Once you buy the house, and have the keys – you can make as much money as you want to. Call us with questions if you are in NC 919 649 5058
Thank you! My boyfriends credit went through so far. What we are dealing with now is the fact that my boyfriend is working under a recruiter so his job is considered temporary. So we are hoping we have hope! Thank you for the reply!!
I currently have been in a USDA mortgage for 7 years and 2 months now and I live in NC but now want to relocate back to Alabama where I have lived most of my life, 51 years. I have been on disability since 1999 and will never get off of it. I get full subsidy and have never missed a payment!
How can I move under current laws without me owing USDA money when I move. I would relocate if able!! Does not seem fair if you want too move and then have too repay back large recapture of subsidy! Makes it almost impossible to move unless you are wealthy! Any options?
Ricky – we don’t offer the USDA Home Loans that are DIRECT loans, and I’m assuming that’s what you are referring to. USDA Loans are 100% loans, so you go into the program with no equity – however, in most places here in NC, we have not experienced a terrible decline in home values. I’m sorry you are struggling, but I would contact the USDA Direct offices and talk to them about your issues, to see if they can make accommodations for you. Good Luck.
Hi Eleanor,
I asked a question about student loans on a different article, thank you for your response to that! My student loans have still not shown up on my credit report.
We faced two weeks of going back and forth with my loan officer’s assistant about which documents were needed while our loan officer was on vacation. We were more than responsive about getting documents back to their office only to be told “sorry we actually need this and not this like we had said.” I was aware of the USDA guarantee fee going from 2% to 2.75% on October 1, so I was adamant about getting the file to USDA prior to this increase. Unfortunately because of the back and forth, the file was not submitted to USDA until September 30. Our due diligence was up September 30. Today our loan officer sent us an email and said that “USDA notified us that effective immediately the guarantee fee was raised so your payment is now $50 more per month than anticipated. We have no control over this.” She said that it would not have made a difference, that she wasn’t aware that the fee would be higher on loans that were already approved prior to October 1. I feel that if we had gotten the loan obligated by USDA a week ago, we would not be dealing with this problem. What is your take on this situation?
In NC, the USDA Office actually notified us mid September that we had to have files SUBMITTED to them by September 21 to get the lower Guarantee fee. So even though you were diligent, you were probably already beat. You needed an appraisal done, and the in house Underwrite, AND be submitted to USDA on September 21 for them to guarantee they would have your file underwritten by the deadline.
Unfortunately, many lenders don’t do that many USDA Loans. USDA doesn’t work like FHA (for instance). FHA says the change goes into place on a certain date. USDA says the change goes into place at the date AND the USDA Underwriter must place an approval on the file by that date. Two different things, unfortunately.
Can I purchase a home from the owner instead of going throw a realtor Hud is also helping me
If the home is currently listed through a Realtor, the Seller is likely obligated to put offers through the Realtor.
There is no realitor involved bout 2 weeks ago I got approved for a loan threw the usda and I found a house and I was wondering if I find a house that is for sale by owner n there not going threw a Realitor can I still get that house cents there is no Realitor
I’m sorry I misunderstood. Yes, USDA Home Loan Underwriters are perfectly Okay with you purchasing a For Sale By Owner property, or one represented by a Realtor. Good Luck!
I have lived in my new home for 15 months and my 45 foot shallow well keeps running out of water. Do I have any options through the government to make the Builder drill a new well? Thanks Rick Gardner
That’s a great question. I have no idea. If you are in NC, I would call the USDA Offices here in Raleigh. The number for the State Director’s Office is: 919-873-2015 Good Luck! I’d love to know what you find!
I have been pre approved for USDA loan but my lender changes his mind because I dont have Two years of tax return. I start working in the US january of 2015. Will i still be able to get a usda home loan?
You need to have a valid Visa (there are many, and USDA only Accepts a few) or be a US Citizen. We can do loans without a 2 year history, but it will depend on the type of employment.
I have greencard and I work as a full-time employee. what is the best number to reach u?
thanks
919 649 5058 is our number in NC
I was about to close on a USDA home and they sent an appraiser to the house. He noted things that he saw wrong with the house however there is an inground pool. The inground pool’s liner has been ripped; would this need to be fixed completely before they can close on the loan?
Jaime – In ground pools have Never been a favorite with USDA. They use to make us fill them in. I’d say you need to speak to your lender immediately!
I am buying a house on short sale and the lender who had the house did an appraisal about 2 months ago and now my lender has done an appraisal which has come back significantly lower than the one just two months ago what do we do it this point because my lender seems to not know what we need to do? how come they wouldn’t be able to use the appraisal that was just done 2 months ago from the other lender
Jaime we have guidelines from USDA regarding appraisals, and unfortunately we would not be able to use an appraisal from someone who is not on our approved Appraiser’s list.
Jaime – it’s a fraud protection issue
hello,
We currently live in New Jersey, and we’re planning to move to North Carolina this summer,can we apply for the USDA LOAN to buy a house while we live in here?
thanks,
I bought my house in august through USDA but never heard about the MCC tax credit. Does this mean I did not qualify for it ?
Yes, that means you missed your opportunity to use it. If you talk to other first time home buyers – PLEASE have them call us! Not all institutions are qualified to offer the program! 919 649 5058
Call us at 919 649 5058, it is not too early to start this process!
Hi I applied for a USDA loan a couple of days ago but wanted to talk to someone about my progress and all they said it takes about two weeks to review the application which does answer my concerns?
Jim, you are applying for a USDA Loan directly through USDA. We do Guaranteed USDA Home Loans, and can give you information the same day Our number is 919 649 5058
We have been approved for 95,000. USDA loan in North Carolina. My question is does USDA loan approved for Modular homes or Manufactured Double wide with brick underpinnings.
That will depend on the lender. We do not offer USDA Loans on Manufactured homes. I normally suggest that folks contact Wells Fargo
It’s really hard to find a home through USDA. Not only can you not buy a mobile or manufactured home, you cannot purchase what is called a stick house. I can’t tell by looking at a house if it is a stick house or not. A stick house is a house that is built on site. I’m getting real confused on what kind of house you can buy using USDA ?
Craig – not many lenders will do a Manufactured home with USDA because you hold title differently with a Mfg home than you do a stick built home (one that is built on site). The easiest way to tell is by looking near the electrical panel, near the heating unit and under the kitchen sink to see if there is a HUD seal It’s a big round blue and green seal that has HUD printed on it If the home has that – then it is usually a manufactured home.
I paid off my recapture amount this month. Is this tax deductible or will I receive a 1099 for paying it off? I ask my uncle who is a CPA & he does not know anything about these loans. Can not find anything online with the information.
Mr. Thomas, we do not offer Direct USDA Loans, so I have no working knowledge of the recapture process for tax purposes. However, I can suggest that you contact the NC USDA RD Office in Raleigh. I hope that helps!
Address: 4405 Bland Rd # 260, Raleigh, NC 27609
Phone:(919) 873-2000
On average, how long does it take to receive the mortgage credit certificate?
We closed on our house in Sept of 2016 and it is now late January 2017 and we haven’t seen the certificate yet
You should have received paperwork at closing? You can contact the NCHFA
I am trying to buy a home with the USDA backed mortgage in NC. My lender has just informed me that the 3 items the appraisal listed as “fair” will have to be updated or fixed in some way so it can be moved to “average”, or it will not pass the USDA underwriters. The home I am buying is being sold as is and anything repairs will be needing to be done by me. I honestly can’t see what is wrong with the fair items. Would something as small as the carpet needing replacement in a bedroom make usda deny my loan? Does my lender even know what she is talking about?
Your lender is correct (as I messaged you directly) that fair items will need to be upgraded. On the flip side of this – the Seller will have this issue with anyone trying to buy the house with ANY financing. It’s not just USDA.
If I am ready to pay or sell my house. What do I have to pay back to the government?
Assuming you have a USDA Home Loan, you will not owe anything. If you have a NC Housing Finance Loan, you might owe something back.
Can you get the loan on a 2010 Clayton doublewide with 1 acer of land for 20k I wonder?