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USDA Loan ApprovalIn today’s video, I will explain how the USDA program can maximize your home loan qualification and also break down the different ways you can obtain a USDA Loan Approval.

However, before we get started, don’t forget to download our USDA Free Resources which is a great starting point for valuable USDA tips, understanding guidelines, and further explanations on proper qualifying steps.

What are the different ways you can get USDA loan approval?

As a USDA approved lender, we offer in-house underwriting which is a tremendous advantage to the USDA loan approval process. When underwriting a USDA loan, we will look at both automated and manual USDA loan approval types.

Automated Underwriting

As a starting point, the Guaranteed Underwriting System (GUS) was developed as the automated underwriting system (AUS) to automate the process of approving USDA Guaranteed Loans. As defined by the USDA:

Tampa FL USDA Loan ApprovalGUS is a tool that helps evaluate the credit risk of the loan request. It compliments, but DOES NOT replace the considered judgment of experienced underwriters”

While a certain credit score does not guarantee approval, a 640 minimum qualifying score is required to be eligible for acceptance through GUS. If the minimum credit score is met combined with the applicant obtaining an “Accept” response through the underwriting system, it can provide the following benefits:

  • Reduced documentation requirements which can help improve processing time;
  • Higher Debt-to-Income Ratios which equals higher a higher USDA qualifying sales price;
  • Exceptions for Previous Adverse Credit History; and
  • Eliminating the need for Verification of Rental History.

Remember that not all lenders utilize the GUS system so make sure you are working with a USDA Approved Lender who knows how to maximize the benefits offered by this unique program!

Manual Underwriting

When the GUS Eligibility response is either a “Refer” or “Refer with Caution”, a more stringent review of the loan file will be required under USDA manual underwriting guidelines. Manual USDA loan approval is more rigorous and document intensive, but we are more than willing to go to bat for our borrowers!

USDA loan approval in Alabama, Florida, Tennessee, Texas

Manual underwriting can allow for the following:

  • Lower Credit Score Requirements;
  • Use of Non-Traditional Credit such as Utility Bills, Rental History, etc.;
  • Limited Credit History; and
  • Exceptions for Bankruptcy, Foreclosure, and Short Sale Waiting Periods.

Please note that Manual Underwriting for USDA loan approval is NOT offered by all lenders. When properly utilized, manual underwriting is an important tool that can provide the ability for USDA loan approval!

Reminders

As a USDA approved lender, we also understand that every scenario is different and not everyone fits into a certain box, which is why it is so important to know all the ways you can get USDA loan approval.

Remember, we are just a phone call away! If you are in need of a USDA approved lender who has experience and expertise, just simply call (800) 806-9836 Ext 280 or email SeanS@MPLX.org and we’ll show you the “Metroplex “difference!

As always, I want everyone to make it a great day and look forward to seeing you right here for the next tip of the week!

USDA loan approval in Alabama, Florida, Tennessee, Texas

Do USDA loans require verification of rental history?

Due to the variety of USDA qualifying questions that we receive on our subject today, I feel it is important to give you the facts in order to help keep your all important financing headed to the closing table!

But before we get started, don’t forget to download our newest educational flyer with the link below.  This free guide is designed to help walk you through the mortgage qualifying process step-by-step and is ideal for both homebuyers and Realtors alike.

So, do USDA loans require verification of rental history?

Everybody’s situation is different, because a person may pay their rent by cash, check, money, or a combination and it may be paid to a private individual, apartment complex, or an independent management company.

Additionally, an individual may not have a verifiable rental payment history such as when one is living with family or rent free.

Tampa FL USDA Approved Lender List

As a starting point, USDA guidelines state that in cases where the qualifying credit score is below 680 and there is a rental payment history, the lender should obtain a rent payment reference either as:

  • Part of the credit report, or
  • Directly from the landlord, or
  • Through cancelled checks covering the most recent 12 months prior to the loan application.

While the USDA guidelines state that “written verifications by independent management companies and private landowners may be accepted in lieu of canceled checks or money order receipts.”

It further confirms that “when a private individual is the applicant’s present landlord, 12 months’ worth of cancelled checks indicating a satisfactory rent payment history is preferred.”

Also, in cases when the applicant does not have a full 12 month history we would need to “verify any previous payment made in the last 12 months”.

Remember, USDA loan eligibility provides that it is the “lender’s responsibility to confirm the applicant’s history of payment towards housing expense is acceptable”.

“One rent or mortgage payment paid 30 or more days late within the last 12 months is an indicator of unacceptable credit”, unless further consideration may be allowed due to extenuating circumstances.

With that being said, here are the situations where a USDA loan would NOT require verification of rental history:

  • USDA Applicants with credit scores of 680 and above are not subject to verification of rent or housing history
  • USDA Loans processed through the GUS underwriting system that receive an “Accept” response are not subject to verification of rent or housing history.

Tampa FL USDA Approved Lender ListIn summary, USDA loans do not always require verification of rental history, but when it is, an acceptable rental payment history will be necessary and the documentation to do so will be dependent on how your rent is paid and the type of landlord you make the payments to.

If you have been denied for a USDA loan due to verification of rental history, please call or email us today in order to take advantage of our free 2nd opinion service which gives you access to an expert opinion and possibly be able to keep that all important financing on track!

SeanS@MPLX.org

(800) 806-9836 x 280

Are you working with a lender that understands the USDA program? Here is the report to download so you can be in the know:

Tampa FL USDA Approved Lender List

 

Can you qualify for a USDA loan with little or no credit history?

How do you qualify for a USDA loan with little or no credit history?

In a situation where there has been little credit established or no credit history reporting at all, can it still be possible to qualify for a USDA loan?

In today’s video I will discuss what options are available for these situations and further explain how it can be possible to qualify for a USDA loan with either limited or no history reporting to the credit bureaus.

And, if you have not yet done so, don’t forget to download our newest educational flyer with the link below. This free guide will show you how it can be possible to increase a qualifying credit score in less than a week!

How do you qualify for a USDA loan with little or no credit history?

First off, what does non-traditional credit really mean?  A traditional credit reference example may be an:

  • Auto loan,Tampa FL USDA Approved Lender List
  • Credit card, or
  • Another type of account that is reporting to the credit bureaus

But, when a potential homebuyer does not have this traditional type of established credit reporting, we still have options are are able to utilize non-traditional credit accounts, also known as alternative credit, to help establish their ability to qualify and repay the loan with examples being:

  • Electric Bill,
  • Water,
  • Phone, or
  • Rental payments through either a management company or cancelled checksTampa FL USDA Approved Lender List

Overall, USDA guidelines require that there be at least two eligible tradelines (accounts) on the credit report with at least 12 months of repayment history to be reviewed as part of their minimum credit reputation requirement.

However, for those buyers who have limited or no credit history reporting at all, USDA guidelines state the following when using non-traditional credit to qualify:

  • Two trade references are required when at least one of the trade references includes verification of rental housing payments or mortgage loan payments.
  • If unavailable, at least three trade references must be used to determine if an applicant has a sufficient credit history.

Once we are able to determine which eligible recent accounts are to be verified, payment histories will be reviewed in order to determine their eligibility towards USDA qualifying.

In summary, remember that it can be possible to qualify for a USDA loan with little or no credit history, but minimum credit conditions will apply, and the use of non-traditional credit may not be a substitute for negative credit.

We understand that qualifying for a USDA Loan may seem difficult and overwhelming, but… when you work with a lender that can maximize the potential of this unique program, it is a match that can help open the door to homeownership.

So, keep us in mind for your next pre-qualification or if you have a current USDA loan in progress and need an expert 2nd opinion.

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

Email: SeanS@MPLX.org
Toll Free: (800)806-9836 Ext. 280

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

Here is the educational flyer to download in order to learn how it can be possible to increase a credit score in less than a week!

Tampa FL USDA Approved Lender

Do USDA loans require two years at the same job?

As we all know, work history can be critical when qualifying for a USDA loan and other programs such as VA, FHA, & Conventional mortgages.

Now, with that being said, do USDA loans require two years at the same job?

There is quite a bit of myth to this topic and in today’s video tip, I will provide the critical facts and explain the details. However, if you do know of anyone that may have been turned down due to their time on the job, please take advantage of our free Second Opinion Service (SOS) and see if we can help turn their financing around!

Do USDA loans require two years on the same job?

When I talk with buyers and Realtors alike, it is common to be asked if USDA loans require two years at the same job.

As you can imagine, guidelines regarding employment history are critical when trying to qualify for a USDA loan and mortgages in general.

Do USDA loans require two years at the same job

USDA 3555 guidelines state the following regarding employment:

“There is no minimum length of time an applicant must have held a position to consider employment income as dependable.”

“However, the lender must verify the applicant’s employment for the most recent two full years and verify that the applicant’s income has been stable.”

Additionally, USDA guidelines confirm that “if an applicant indicates he or she was in school or in the military during any of this time, the applicant must provide evidence supporting this such as college transcripts or discharge papers.”

Also, for those buyers who may have just went back to work for various reasons it states: “If the applicant has recently re-entered the workforce after an absence to care for a family member or minor child, extended medical illness, or other circumstance reasonable to the lender, the applicant must provide evidence.”

However, in regards to gaps of employment, the guidelines further confirm: “The applicant should not have any gaps in employment of more than a month within the two year period prior to making the loan application.”

As always, “It remains the lender’s responsibility to analyze the gaps in employment as it relates to the probability of continued income”.

Do USDA loans require two years at the same job?

As you can see, not one size fits all in these scenarios and it is important to point out, that while you do not have to be on the same job for two years in order to qualify for a USDA loan, USDA approved lenders still must determine stable and dependable monthly income from verified sources.

Please remember that job stability provides strength with your qualifying and having long time employment at the same job can be a very strong compensating factor towards both underwriting and USDA Rural Development approval.

 

When you compare a USDA loan to an FHA loan, it is important to understand the terminology and how the different borrowing costs can affect your budget and the price of the home you may qualify for. Ultimately, we’ll answer the question, “Do USDA loans have PMI?”

In today’s video, I will show you the facts and also key differences between USDA, FHA, and Conventional financing.

Is Mortgage Insurance required for a USDA Loan?

PMI (Private Mortgage Insurance) exists on conventional loans when the down payment is less than 20%, and can be paid in a variety of different ways. The Homeowner’s Protection Act allows for PMI to be terminated automatically or by request when the balance is paid down to 80% or less of the original value of the property.

Tampa FL USDA Approved Lender List

FHA loans include MIP (Mortgage Insurance Premium) and it is paid monthly.

When your down payment on an FHA loan is less than 10%, you will be required to pay mortgage insurance for the life of the loan.  When the down payment on an FHA loan is 10% or greater, FHA mortgage insurance will be removed after 11 years.

Also, FHA charges a one-time financed mortgage insurance premium which is equal to 1.75% of the loan amount.  While that may seem like a lot, thankfully they allow you to finance that into the loan and does not have to be paid out-of-pocket.

Do USDA Loans Have PMI?

Here’s the good news – USDA Loans do not technically have mortgage insurance  Instead, they have an “annual premium” and even though it is for the life of the loan, it is over two times lower when compared to FHA monthly mortgage insurance fee!Tampa FL USDA Approved Lender List

Similar to FHA’s financed mortgage insurance, USDA also charges a Guarantee Fee, but it is only 1% and it can also can be financed into the loan.

Here is a current example of how the monthly costs compare between USDA and FHA:

$100,000 Loan Amount Example Comparing USDA and FHA Costs:

  • FHA MIP: .85% X 100,000 = $850 / 12 = $70.83 per month
  • USDA Premium: .35% X $100,000 = $350 / 12 = $29.17 per month

Also, as mentioned, a here is how the one-time financed charged compared:a

  • FHA 1.75%:  $1,750
  • USDA 1%:    $1,000

As you can see, even though USDA Loans do NOT require a down payment, their borrowing costs are better in comparison to FHA loans which does require a minimum 3.5% down payment.

Also, remember that your closing costs can be financed with a USDA loan when the appraised value is higher than the purchase price.  FHA loans do not allow this benefit.

Both FHA and USDA program costs are subject to change and as of today we are using the most updated calculations for example and illustration purposes.  Please note that all terms and comparisons lists are subject to change without notice.

As an approved USDA lender in Florida, Texas, Tennessee, and Alabama, we hold expertise in the USDA process and are a one stop point of contact from pre-qualification through closing.

Just call or email if you have any qualifying questions, want to discuss a new scenario, or would just like to take advantage of our free 2nd opinion service which is great for those existing transactions

Seans@MPLX.org

(800) 806-9836 Ext. 280

I want everyone to make it a great day and I look forward to seeing you right here for the next tip of the week!

Click here to download your USDA Blueprint for Success educational flyer for more details:

Tampa FL USDA Approved Lender List

Welcome back everyone, Sean Stephens here with Metroplex Mortgage Services and another USDA Loan Pro video quick tip.

We commonly receive questions on this topic and in today’s video I will explain the facts and share the details that you need to know to keep your financing headed in the right direction.

Also, if you have not yet done so, feel free to download our newest “USDA Blueprint” with the link below. This free guide is designed to help walk you through the USDA process step-by-step and is a great educational resource for both homebuyers and their agents.

What is the closing time on a USDA Loan?

As a USDA Approved Lender, we have the ability to work directly with Realtors, homebuyers, and the USDA field offices when submitting the file for their approval.

Many banks, lenders, or credit unions are not USDA approved, therefore they must submit to a 3rd party USDA approved lender to handle the underwriting process which immediately brings to mind the old saying “too many cooks in the kitchen!  

Being a USDA approved lender provides us the ability to manage the entire loan process from right within my office which includes:

  • Pre-QualificationTampa FL USDA Approved Lender
  • Loan Application
  • On-Site Underwriting and Loan Approval
  • Submitting the file to USDA
  • Ordering closing documents, and
  • Loan Funding

This type of control combined with giving you the same point of contact through the process allows us to save time where possible and keep all parties on the same page.

Now, on the other hand, if you are not working with a USDA approved lender, they will have to submit to another lender who has USDA approval to underwrite, approve, and submit the files to USDA.

As you can see, this just creates another party involved in the application, another set of requirements, and potentially another source of delay during the process.

So, are you working with an actual USDA Approved Lender? Here is a link to find out:

USDA Approved Lender List

In Summary, while many may offer the USDA program, it is important to find out who has the required experience to help navigate the USDA loan approval process successfully.

Sebring FL USDA Approved Lender

 

It may sound funny, but we truly eat, breathe, and sleep USDA Loans each and every day because this is a program that is there to benefit our rural communities.

800-806-9836 Ext. 280

SeanS@MPLX.org

Just call or email if you have any USDA qualifying questions, want to discuss a new scenario, or would just like to take advantage of our free 2nd opinion service which is great for those existing transactions

I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!

CLICK THE IMAGE BELOW TO DOWNLOAD YOUR USDA BLUEPRINT FOR SUCCESS

Tampa FL USDA Approved Lender

Do USDA loans have a maximum sales price?

Being able to make the most of a homebuyer’s qualifying ability is critical in today’s market, and in this short video I will explain the facts that you need to know in order to keep your financing headed in the right direction.

Also, if you have not yet done so, feel free to download our newest “USDA Blueprint” with the link below.  This free guide is designed to help walk you through the USDA process step-by-step and is a great educational resource for both homebuyers and their agents.

Today’s video is great for any Realtor or homebuyer looking to expand their home search and open up a wider range of properties to consider.

USDA Loans have NO Loan Limits!

Yes, that is correct! Unlike FHA and Conventional loans which have published loan size limits, there is no maximum loan amount under the USDA Single Family Housing Guaranteed Loan Program.

Many in the Real Estate community automatically assume that USDA loans are only available for smaller loan sizes, but that is simply not true.

Due to the fact that USDA loans do not have loan limits, it can be a great alternative to both Conventional and FHA programs, which both can have potentially larger monthly payments due to higher mortgage insurance costs.

Tampa FL USDA Approved Lender ListWhile USDA loans do not have loan size restrictions, they do have healthy income limits based on family household sizes, which were recently increased for the majority of counties. USDA qualifying will be based on the buyer’s ability to repay the loan.

USDA loans can help open up additional property types such as homes located in subdivisions, gated communities, and townhomes, provided they are in a USDA eligible area.

In summary, the USDA loans program offers high flexibility due to the following:

  • 100% financing
  • Ability to finance closing costs
  • More flexible credit guidelines than conventional loans
  • And as discussed today – NO Loan Limits!

While many lenders may offer the USDA program, it is important to find out who has the
necessary experience to navigate the USDA loan approval process successfully.

USDA loans are in the blood of my entire team. As an approved USDA lender Metroplex Mortgage Services is proud to serve our rural communities.Tampa FL USDA Approved Lender List

800-806-9836 Ext. 280
SeanS@MPLX.org

Just call or email if you have any USDA qualifying questions, want to discuss a new scenario, or would just like to take advantage of our free 2nd opinion service which is great for those existing transactions

I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!

How long does it take to qualify for a mortgage after a Short Sale?

With USDA, FHA, VA, or Conventional loans their Short Sale waiting periods vary, and while some are longer than others, in today’s video I will explain the differences between each program side by side.

Remember, if you need help or a have question that is what we are here for, so just call or email to discuss your scenario because we are known for returning calls, replying to emails, and responding to your messages. Now, wouldn’t it be nice if everyone did that!

How soon can you qualify for a mortgage after a Short Sale

In many cases a Short Sale does not occur due to financial mismanagement, but instead due to third party events and circumstances that were outside of the homeowner’s control.

With that being said, once a short sale has been completed, waiting periods will apply with how quickly you can be able to re-qualify for a mortgage.

As a general overview and starting point, here are the standard short sale qualifying guidelines for Conventional, VA, FHA, & USDA:

Qualifying for a conventional loan after a short sale, Fannie Mae and Freddie Mac have different guidelines.

  • Fannie Mae requires 4 years from short sale completion date
  • On the other hand, Freddie Mac has no waiting period after a completed short sale, but does require an Accept response through Loan Prospector which is their automated underwriting system.

When attempting to qualify for a VA loan after a short sale, VA guidelines will treat a short sale as similar to a foreclosure and require a two year waiting period along with re-established credit.

FHA guidelines for qualifying after a short sale require a three year waiting period which begins on the date of the transfer of title by short sale.

While there is a limited opportunity under USDA guidelines to qualify for a short sale under their three year waiting period, USDA generally requires three years from the date of the short sale.

When discussing the potential of qualifying for a mortgage after a short sale, beware of lenders stating they can get an exception for less than the standard waiting periods discussed above.  While it can be possible, the guidelines are specific and leave little room for these type of exceptions.

How soon can you qualify for a mortgage after a Short Sale

If you have recently been denied for a mortgage because of previous short sale, please take advantage of our free Second Opinion Service (SOS) which is great for both new pre-qualifications and existing transactions.

 

Can a Veteran be eligible for two VA loans at the same time?

What happens if a Veteran wants to purchase another home with their VA eligibility before their current VA loan is paid off?

In today’s video, I will break down the details on how it is possible for a Veteran to have two VA loans at the same time.

Remember, if you need help or a have question that is what we are here for, so just call or email to discuss your scenario because we are known for returning calls, replying to emails, and responding to your messages. Now, wouldn’t it be nice if everyone did that!

Can you have two VA loans at the same time?

When discussing VA entitlement, it can be complicated, so bear with me on the details so I can walk you through the steps on how a Veteran can have two VA home loans at the same time!

Can you have two VA loans at the same time?

First off when discussing VA entitlement, it will be broken up into Basic and additional entitlement, which commonly may be referred to as “Bonus” entitlement.

Basic Entitlement can never exceed $36,000 and is used to guaranty VA home loans up to $144,000.

Also, a Veteran has additional entitlement or “Bonus” entitlement, which can be used on loan amounts that exceed $144,000. This will cover the remaining loan amount in excess of $144,000 up to the FHFA’s conforming loan limit, which is currently $424,100.  FHFA loan limits may be higher depending on the county where the property is located.  Please review these resources for further information on how to calculate a VA Home Loan:

FHFA County Loan Limits

VA County Loan Limits

Remember, “Bonus” entitlement can still be used even if a Veteran has $0 remaining of their basic entitlement!

VA “bonus” entitlement can be used in the following examples where a Veteran has lost part of their entitlement:

  • When a Veteran currently holds a VA loan in their name; or
  • May have went through a previous bankruptcy, foreclosure, or a short sale with a VA loan;

If you have used some of your basic entitlement, you may be eligible to use the remaining basic or also utilize any remaining “bonus” entitlement. Lenders will generally lend up to 4 times your available entitlement without requiring a down payment, provided your income and credit qualify, and the property appraises for the asking price.

Can you have two VA loans at the same time?

I realize the terminology can be complicated, but as a VA approved lender, use my team as a resource to discuss your qualifying questions and how you can have two VA loans at the same time.

We at Metroplex Mortgage Services want to take this moment and thank all of the brave men and women who serve our country. We are forever grateful!

Can you get a mortgage immediately after discharge of a Chapter 13 Bankruptcy?

With USDA, FHA, VA, or Conventional loans Chapter 13 Bankruptcy waiting periods can be more flexible when compared to Chapter 7.  In today’s video I will explain the differences and qualifying advantages between each program side by side.

Remember, if you need help or a have question that is what we are here for, so just call or email to discuss your scenario because we are known for returning calls, replying to emails, and responding to your messages. Now, wouldn’t it be nice if everyone did that!

How soon can you qualify for a mortgage after a Chapter 13 Bankruptcy?

In many cases a Chapter 13 does not occur due to financial mismanagement, but instead due to third party events and circumstances that are outside of the homeowner’s control.

With that being said, once a Chapter 13 Bankruptcy has been discharged, waiting periods will apply with how quickly you can be able to qualify for a mortgage.

Tampa Florida USDA Approved Lender

As a general overview and starting point, here are the differences between a Chapter 7 and Chapter 13 bankruptcy:

  • Chapter 7: You ask the bankruptcy court to discharge most of the debt you owe
  • Chapter 13: You file a repayment plan with the bankruptcy court to pay back all or a portion of your debts over time.

Additionally, because of the required repayment period under a Chapter 13, underwriting guidelines are more flexible with how soon a potential buyer can qualify after discharge.

 Here are the standard Chapter 13 Bankruptcy qualifying guidelines for VA, USDA, FHA, & Fannie Mae:

Conventional loans under Fannie Mae: 2 years from the discharge date

USDA, FHA, and VA Loans will allow financing immediately upon completion of the Chapter 13 repayment plan, which means there is no additional waiting period needed after the discharge date!

Now, due to the short time allowed for mortgage qualifying after completion of a Chapter 13 bankruptcy, more stringent manual underwriting guidelines may apply and additional review will be needed to determine eligibility.

Tampa Florida USDA Approved Lender

When trying to qualify for an FHA loan after a Chapter 13 bankruptcy, remember to be cautious about subsequent deed transfer dates when there was a mortgage included in a bankruptcy, because while FHA bankruptcy guidelines apply after the Chapter 13 discharge date, FHA will then restart their three year foreclosure waiting period from the date the deed officially transfers out of the homeowner’s name!

Thankfully, USDA, VA, and Fannie Mae guidelines are more lenient when a mortgage was included with a bankruptcy and do not restart the foreclosure waiting period based on the deed transfer date.

We realize that qualifying after a Chapter 13 bankruptcy can be complicated, but that is where we step in to help. My team is built to help walk homebuyers through the qualifying  process step by step.

Just simply call or email to discuss your scenario, schedule a convenient call back time, or complete our 1-2-3 online pre-qualifier to get started.

We are able to offer specific experience and expertise on how to qualify for a mortgage after a Chapter 13 Bankruptcy, and  through this, we are able to provide value to the communities we serve.

I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!

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