Jul 14

25

Do you know what “Payment Shock” is and how it can affect USDA loan qualifying?

Today’s topic is important for both First Time Home Buyers and previous owners that are re-entering the purchase market. Today’s video tip will discuss and explain how payment shock can affect USDA loan qualifying?

Payment shock is the difference between your current housing expense and what the new housing expense will be.

For example, if you are renting then we would compare what your current rental payment is versus your new mortgage payment which would include monthly amounts for your Principle and Interest, Property Taxes, Homeowner’s Insurance, USDA monthly premium, and any maintenance or association type fees.

Remember, even though fees such as HOA or Special Maintenance, of Community costs will not normally be included within an escrow account, they still have to be counted towards both debt ratios and the payment shock calculation.

Payment shock is a risk layer that underwriters will review and take into consideration during the loan approval process and it is calculated by diving the new total housing expense by the current rental payment.

Payment shock can be a factor on any loan that goes above the USDA published guideline for housing expense which is currently 29% of an applicant’s gross monthly qualifying income.

In the case of a First Time Home Buyer who is trying to qualify for a USDA loan, but may live at home rent free any new mortgage payment will be at 100% payment shock since you are going from NO verifiable rent history to a new mortgage payment.

Now let’s take a look at another example to help illustrate:

Mr. & Mrs. Smith have been renting for the past year, always pay their rent by check, and the current monthly amount is $700. They home they have found will have a new total monthly housing expense of $850 .

1. Take the new housing expense of $850
2. Divide by current rental payment: $700 = 1.214
3. Then subtract “1”: 1.214 -1 = .214
4. .214 = 21.4%

OK, I know what you may be thinking, what happens when the new mortgage payment will actually be lower than the current rent.

In this case you have a situation where there is actually NEGATIVE payment shock. As you can imaging, to be able to show you have consistently paid rental payments that are higher than your new mortgage payment, that is a tremendous positive factor to be considered towards the USDA approval process.

As I have mentioned many times before, in order to get credit for either low, no, or negative payment shock we must be able to actually verify rental payment history. This can be done through cancelled checks or verification by either a management company or apartment complex. Paying rent by cash, especially to a private landlord it not customarily an accepted way to verify rental payment history.

Remember to not let these details overwhelm you, because that is where we come in to help. As a USDA approved lender, Metroplex Mortgage Services holds an expertise in this unique program and can walk you through the USDA qualifying process step by step.

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in Realtor Tips, USDA FAQs

Jul 14

18

Are Closing Costs Included With A USDA Loan?

This is a very common question that we receive at Metroplex Mortgage Services, and in today’s video tip we will cover the details about how a USDA loan can offer flexibility with closing costs and help reduce out of pocket expenses.

USDA loans offer the benefit of 100% financing, or no Down Payment.  However, that should not be confused with No Money out of pocket.

When you are buying a home, there are customarily 2 sets of out of pocket expenses:  Your Down payment and Settlement Charges otherwise known as closing costs.

With 100% financing, USDA loans eliminate the need for a down payment, but that does not have anything to do with closing costs.

USDA loans provide for the ability to finance closing costs into the loan.  However,  In order to finance closing costs, the home must appraiser for more than the purchase price you have agreed to.  This feature is unique to USDA loans, and not available with conventional, FHA, or VA programs.

Examples of what charges could be financed with a USDA home loan are:

  1. Closing Costs such as Title Charges, Loan Costs, Survey, Recording Fees, etc.)
  2. Pre-Paid Items such as your Escrow Accounts, Homeowner’s Insurance Premium, and Pre-paid Interest.

For example, if your sales price is $100,000 and the appraiser determined the value of the home at $103,000, then the loan amount could increase up to the appraised value and include $3,000 of out of pocket settlement charges.

The one exception to this rule is for the 2% USDA Guarantee fee, which can always be financed into the loan amount regardless of the appraisal.

As always, the buyer can contribute their own funds at closing or if possible can also negotiate for the seller to pay up to 6% of the sales price towards a buyer’s settlement charges.

When trying to finance closing costs, it is important to remember that there is no guarantee of what the home will appraiser for so be sure not to put all of your eggs in one basket and hope for the best.

If you do need assistance with closing costs, it is critical to address this upfront with both your mortgage professional and Realtor – before a sales contract has been written.

As a summary, USDA loans do not automatically include customary out of pocket settlement charges, but through a combination of the buyer’s own funds, possible seller concession, and the ability to finance closing costs it allows for flexibility when budgeting for out of pocket expenses.

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in USDA FAQs, USDA Loan CLosing Costs

Jul 14

16

Highlands County Ship Funds Update!

During a recent call with Lucy at the housing office, she informed me that the SHIP program recently received $870,000 in new funding. This is great news for both Realtors and all eligible Highlands County first time homebuyers.

Since I receive questions about the Highlands County SHIP program often, so I thought it would be a good time for a quick review of the benefits.

SHIP stands for the State Housing Initiative Partnership Program which provides down payment assistance to very low, low and moderate income households, and is available through the Highlands County Housing Department.

Here are a few key points about SHIP qualifying:

  • Eligible applicants must be first time homebuyers
  • Funding is on a first come, first serve basis while funds are available
  • Properties may be purchased anywhere within the Highlands County area
  • Manufactured homes are NOT permitted
  • The current maximum sales price is set at $189,682

The SHIP Funds Program requires monthly payments for:

  • 20 years on amounts less than $10,000, or…
  • 30 years on amounts $10,000 and greater,
  • Up to a maximum of $15,000 in funding

Remember that the Highlands County Housing Office will determine the final award amount.

A few other requirements for the SHIP Funds Program consist of:

  • An acceptable home inspection reviewed by the Housing Office
  • First Time Home buyers must successfully complete a Home Buyer Education Course and provide a Certificate of Completion.
  • One eligible provider is www.homebuyerfunds.com which offers free online education courses. Check the link below for more details.
  • Minimum cash contribution will be required from the buyer that ranges from $750 to $1200 depending on income bracket.

Please note that income limits are determined as a result of total family household income.

For your convenience, here are the income limits from the most updated income chart as provided by the housing office.

INCOME LIMITS ADJUSTED TO FAMILY SIZE: January 28, 2014

CHART
Now that we have covered the basics, remember that we are one of the most experience lenders with SHIP Funds and are able to process those applications side by side with their first mortgage. Also, when combined with the USDA program, it can be a powerful combination which helps down the path towards affordable homeownership.

I appreciate all of the homebuyers we have been able to help through the Highlands County SHIP program and my entire team is looking forward to many more while funding is available.

Thank you for the continued referrals and remember to just call or email to discuss your scenario, and let us show you the Metroplex difference!

Let’s make it a great day, and I look forward to seeing you right here for the next tip of
the week.

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in USDA FAQs

Jul 14

11

How Do You Qualify For A Credit Waiver With A USDA Loan?

Today’s topic is important, because while many lenders only process automated approvals, understanding how a USDA credit waiver works could be the source of a financing 2nd chance to many potential homebuyers.

As a starting point, USDA files that receive a GUS Accept response and do not have to be manually downgraded – will NOT require a credit waiver.

First off, USDA guidelines require the applicant to have a credit history which indicates a reasonable ability and willingness to meet obligations as they become due.

Credit waivers will be needed on files which have been approved by underwriting, and have indicators of negative (adverse) credit.

In these situations, the lender may establish mitigating circumstances to establish the borrower’s intent for good credit when the applicant provides evidence to support that the adverse credit was:

1. Temporary in nature
2. Beyond the applicant’s control, and
3. Circumstances contributing to the adverse credit have been removed.

Examples of supporting documentation which could be provided by the borrower are:

• Hardship letters signed & dated by the applicant
• Attorney letters if applicable
• Medical documentation
• Evidence of payment arrangements or payment history with creditors

Once this evidence has been provided, a properly documented credit waiver can be generated which explain the details surrounding the adverse credit, and reinforces the request for loan approval.

Here are the steps in the process:

1. Applicant

a. Must demonstrate an acceptable ability and willingness to pay debts on time
b. In cases of negative credit, they must supply the lender with evidence to support their circumstances and intent for good credit

2. Lender

a. Review credit of all applicants
b. Identify any adverse credit per USDA guidelines
c. Review explanations, hardship letters, and documentation provided by applicant
d. If approved, then must submit a proper credit waiver to USDA (RD)

3. USDA Rural Development

a. Reviews credit report
b. Reviews credit waiver submitted by the lender
c. Ensures that credit waivers meet USDA qualifying guidelines

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in USDA FAQs

Jun 14

27

How Can the “GUS” Underwriting System Help you Qualify for a USDA Loan?

Whether you are a homebuyer or a Realtor working with USDA clients, having a lender that properly utilizes “GUS” has a tremendous impact with USDA loan qualifying. This short video tip will provide the necessary details to help give you the advantage when qualifying for a USDA home loan.


The Guaranteed Underwriting System also known as “GUS”, was created by USDA Rural Development to serve as their automated underwriting system (AUS). The system’s purpose is to help lenders process Rural Development Guaranteed loan applications.

Authorized lenders can use GUS to submit:

- An application for eligibility determination

- Pre qualification, or…

- Final submissions to Rural Development

The Guaranteed Underwriting System is a rules based decision engine and a modified version of the FHA TOTAL scorecard.

With these combined functionalities GUS can indicate recommended levels of underwriting and documentation to determine a loan’s eligibility for the Single Family Housing Guaranteed Loan Program (SFHGLP).

After the loan data is entered, GUS then delivers a recommendation based on a risk evaluation analysis, which can be as follows:

  • Accept
  • Refer, or
  • Refer with Caution.

Important factors that GUS will determine are:

  • Eligibility for:
  1. Income
  2. Credit, or
  3. Property Location
  • Accepted qualifying ratios (For example debt ratio waiver requests are NOT required for GUS Accept files)

Please note, that as with any Automated underwriting system, the findings are only as good as the data entered. This underscores the importance of accuracy at this stage of the process, because although GUS is not a final underwriting stamp of approval, it does provide a roadmap for eligibility and what is needed for approval.

As a USDA approved lender, we utilize the GUS system and are able to maximize the benefits it provides to help both qualify homebuyers and process USDA loans.

We realize that qualifying for a USDA loan may seem overwhelming, but when you are paired with a lender who can maximize the potential of this unique program, it is a match that can help open the door to home ownership.

My team is ready to help with your next pre qualification, or if you happen to need an expert second opinion.

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in USDA Advantages, USDA Credit Qualifying, USDA FAQs

Jun 14

20

How Do You Qualify For a Debt Ratio Waiver On a USDA Loan?

How do you qualify for a debt ratio waiver on a USDA loan?

What happens if the home you want appears to be just out of budget? USDA loans can provide payment flexibility and increased qualifying ratios in certain cases.

Today’s video tip is critical for determining your qualifying price range and excellent information for both buyers and Realtors.

Just to clarify, please note that debt ratio waivers are NOT required on loan files that receive a GUS Accept. Today’s topic will cover any loan files that receive either a GUS Refer, Refer with Caution, or have to be manually downgraded by underwriting.

Effective 5/1/13 USDA Guidelines defined that a debt ratio waiver may be granted if ALL of the following conditions are met:

  1. Principle & Interest, Taxes, Insurance (PITI Payment) is between 29% and 32% (This would be considered your housing expense and would also include any association fees if applicable)
  2. Total ratio is between 41% and 44%
  3. Credit score of all applicant(s) is 680 or greater, and….
  4. At least one of the following compensating factors is identified…..

Compensating Factors

A. Proposed PITI payment is equal to or less than the applicant’s current verified housing expense for the past 12 months as documented by either a:

  • Verification of Rent forms (VOR) – (Non Family), or
  • 12 mos. cancelled rent checks may be required

B. Accumulated savings of liquid assets available post loan closing of at least 3 monts or greater PITI payments after closing as verified by:

  • Verification of Deposit form (VOD)
  • 2 consecutive recent bank statements
  • NO Cash on hand

C. All employed applicants have been continuously employed with their current primary employer for a minimum of 2 years as documented by.

  • Verification of Employment Forms (VOE)
  • This is NOT applicable for self employed applicants

 A debt ratio waiver request must be submitted to Rural Development, in writing, with the compensating factors listed to support the request.

This is just another example of how a USDA loan can provide qualifying flexibility when the documentation supports the request.

As you can tell, USDA Rural Home Loans have guidelines that are very specific to this unique program.  Always be certain that you are working with a mortgage professional that is well versed and understands the full potential of this powerful loan program. As an approved USDA lender, we are experienced in these situations and are here to help guide you through the process.

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in USDA FAQs

Jun 14

13

How Do You Qualify for a USDA Loan if You Have Co-Signed Accounts?

What happens when you try to help a friend or family member buy a car, or maybe they need help in taking out a loan? Well, it could very well hurt your ability to qualify for a mortgage, but USDA guidelines can help in these specific situations.

This short video tip will explain the details to keep you in the know, so without further delay let’s get started.

Per USDA Guidelines, the following applies in situations where debts have been co-signed by the applicant for another party:

  1. They are to be considered in the debt ratio unless the applicant provides evidence that it has not been necessary for them to make the payments over the past 12 months.
  2. Acceptable evidence includes canceled checks, money order receipts and/or bank statements of the co-obligor or other third party.
  3. If any late payments are reported for the previous 12 months the liability must be included.
  4. Debts identified as “Individual” must always be considered in the debt ratio, regardless of who is making the monthly payment as the legal obligation resides with the applicant.

In summary, USDA guidelines can be flexible in situations with co-signed accounts, but there must be at least 12 months of payment history, no late payments, and have proper documentation to support who has made the payments.

This is a unique guideline specific to USDA loans, so be certain you are working with a mortgage professional that is well versed and deeply engrained with the inner workings of this complex loan program. As an approved USDA lender, we are experienced with these situations and are here to help guide you through the process.

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in USDA Underwriting Guidelines

Jun 14

6

How Does Court Ordered Child Support Affect USDA Qualifying?

How Does Child Support Impact USDA Loan Qualifying?

USDA guidelines are very specific when there is documented child support involved, but if not properly calculated it can easily put the brakes on buying a home. Today’s video tip will keep you in the know about this part of USDA qualifying.

Per USDA published guidelines for receipt of court ordered child support income:

I. When calculating repayment or loan qualifying income, lenders must obtain documentation to verify and support that:

  • Payments are to be received for at least the three years after the date of closing
  • Document payments have been received for the past 12 months
  • In cases of payment periods of less than 12 months, this may be acceptable if the lender can document the payer’s ability and willingness to make timely payments.
  • Child support has to ability to be grossed up when meeting USDA non-taxable income guidelines which can provide additional repayment income and help with qualifying ratios.

II. Now, for Annual Income calculations which determine USDA household income limits:

  • Child support payments received must be included with annual income calculations (Remember, this will apply to all household members even those not on the loan)
  • They can be excluded if court ordered payments are not received for an extended period of time, and a reasonable effort has been made to collect them through the official agency responsible for enforcement.

On the other hand, for those required to pay child support the following guidelines will apply:

  • Court ordered child support obligations must be included in the debt ratio, unless there is a release of liability from the court.
  • Child support payments paid by an applicant are not eligible for child care expense deductions (Household Income Calculations – Annual Income)

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in USDA FAQs Tagged , , , ,

May 14

30

How Can a USDA Loan Help You Purchase a Home?

Can a USDA Loan Help Me Buy a Home? 

The USDA Rural Housing Program is sought after by consumers, but due to the complex guidelines,  education is critical to unlocking the potential behind this unique program.

Today’s video tip will breakdown the benefits which will also help answer all too common questions.

So What are the Benefits of a USDA Rural Home Loan?

  • USDA Loans allow for 100% Financing. When compared to FHA or Conventional programs, this offers an immediate reduction in out of pocket expenses.
  • Lower Monthly Premiums. Similar to FHA monthly mortgage insurance premiums, USDA loans also carry a monthly fee, but it is over 3X lower, thus allowing for a reduced monthly payment & increased affordability.
  • The ability to finance closing costs. In cases when the appraised value is higher than the sales price, USDA loans will allow homebuyers the option of financing eligible out of pocket settlement charges.
  • No Maximum Loan Limit. Mortgage amounts are determined by qualifying ability, thus not restricting homebuyers by setting pre-determined loan limits.
  • Flexible Credit Qualifying. While minimum credit conditions are required, exceptions can be made for previous short sales, bankruptcies, and foreclosures depending on the circumstances. Utilizing Manual underwriting guidelines is another option that we can provide down to a 620 score, but be cautious because not all lenders work with manual underwriting.
  • Generous Household Income Limits. The majority of counties*  have income limits up to $74,750 for a 1 to 4 person household, $98,650 for a 5 to 8 person household size.  Increased limits are allowed for higher cost counties and for family households with 9 or more people. (*AL, FL, TN, TX)
  • Not Restricted to Only First Time Homebuyers. While many assume that only first time homebuyers can be eligible, previous homeowners are also possible candidates provided they are purchasing a primary residence and meet the qualifying criteria.

So what are the basics to qualifying?

1. Property Eligibility. The subject property being purchased must be located in an approved USDA Rural Development area.  There are no exceptions to this policy. Eligible areas can vary per county.

2. Income Limitations.  As mentioned previously, there are income limitations based on family household size. USDA loans consider income from all family household members, and not just who is on the loan. However, deductions can be available to assist in qualifying, so make sure to double check with a mortgage professional who is deeply experienced with USDA Rural Home Loans.

Please note that all loans are case by case scenarios, credit scores do not guarantee approval, and minimum credit conditions will apply.

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in USDA Advantages, USDA FAQs Tagged

May 14

16

What Happens if Your USDA Loan Approval is Downgraded?

What Happens If a USDA Loan Approval is Downgraded? 

USDA qualifying guidelines can be flexible, but also complicated. This week’s post will explain how to keep your loan on track in cases where your automated approval is downgraded and requires a more stringent review with manual underwriting.

What Does a USDA Loan Approval Downgrade Mean? 

With USDA loans, files are submitted initially through the Guaranteed Underwriting System, also known as GUS. The ideal result would be classified as an “Accept” and allow for streamlined processing and reduced documentation.

However, there are cases when an “Accept” eligibility response must be reviewed and manually downgraded to a “Refer” which would require manual underwriting.

Here are two examples to help illustrate:

  • In a situation where the potential applicant has open authorized user accounts and does not meet the required guidelines, an accept would be downgraded to a refer.
  • Or in a case where there are disputed tradelines listed on the credit report. This could be another reason for an underwriting downgrade if the qualifying criteria are not met.

Downgrading a loan approval does not mean the end of the road or an automatic denial. However, this will require the additional steps needed that come with manually underwriting a loan file.

Not all lenders offer manual underwriting, so be certain that your mortgage professional is experienced with all aspects of the USDA loan process in order to help navigate this complex loan program.

Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.

USDA Blueprint for Success

If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.

For more immediate scenarios, click here to get pre-qualified for a USDA mortgage today!

So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

Questions? Contact Us Here.

Toll Free: (800) 806 – 9836 Ext. 280

And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.

Please remember that mortgage requirements are constantly changing so stay current and up to date by subscribing on the right for future video tips.

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Posted in USDA FAQs, USDA Underwriting Guidelines


Sean Stephens

Metroplex Mortgage Services

Contact Me Here
Toll Free: (800) 806-9836 Ext. 280
NMLS ID# 185288

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