Posted on: 01st May, 2010 12:47 pm
Hi everyone! I've been looking into the USDA loan requirements and it seems like DH and I may qualify. I was hoping some of you could lend any advice or information about where we might sit on this.
The only real stickler that I'm worried about is not having any credit. Neither of us have built up any credit whatsoever because we lived in the UK most of our adult lives--but we have no credit built up there to use as a reference, either. We moved to Arkansas in October 2008 and have applied for the odd credit card once or twice since then, but never got approved because of lack of credit history. I think we might have a chance of sliding by on "unconventional credit" such as utilities and rent, but all we have in that department is rent (our rental history dates back to July 2009, so nearly a year), water, and electric, which also dates back to July 2009. Is it possible that this will be enough to satisfy the credit requirements? Has anyone had success getting a USDA loan without a conventional credit history?
Another question I have is a little on the odd side. I understand that with a USDA loan, one can borrow 100% of the value of the house. Well, the home we are interested in is listed at $85,000, but has been reduced from $99,900. That leads me to believe the home is worth at least $100,000. If we were approved for this USDA loan, would we be able to take out a little more than is necessary to cover the cost of the house as well as closing and application fees? I'm just wondering if it would be possible to take out an extra grand or two to fix up the place (mainly paint, as it needs a paint job pretty badly), as well as set up a proper vegetable garden and take care of any other little nuances that may need repair, but which aren't "necessities".
I'm sorry for being so long-winded! I'm afraid I've gotten my hopes up about the house and our appointment with the loan officer isn't until Monday. I just want a better idea of where we sit on this.
Thanks for reading and for any input you can offer!
--Kim
The only real stickler that I'm worried about is not having any credit. Neither of us have built up any credit whatsoever because we lived in the UK most of our adult lives--but we have no credit built up there to use as a reference, either. We moved to Arkansas in October 2008 and have applied for the odd credit card once or twice since then, but never got approved because of lack of credit history. I think we might have a chance of sliding by on "unconventional credit" such as utilities and rent, but all we have in that department is rent (our rental history dates back to July 2009, so nearly a year), water, and electric, which also dates back to July 2009. Is it possible that this will be enough to satisfy the credit requirements? Has anyone had success getting a USDA loan without a conventional credit history?
Another question I have is a little on the odd side. I understand that with a USDA loan, one can borrow 100% of the value of the house. Well, the home we are interested in is listed at $85,000, but has been reduced from $99,900. That leads me to believe the home is worth at least $100,000. If we were approved for this USDA loan, would we be able to take out a little more than is necessary to cover the cost of the house as well as closing and application fees? I'm just wondering if it would be possible to take out an extra grand or two to fix up the place (mainly paint, as it needs a paint job pretty badly), as well as set up a proper vegetable garden and take care of any other little nuances that may need repair, but which aren't "necessities".
I'm sorry for being so long-winded! I'm afraid I've gotten my hopes up about the house and our appointment with the loan officer isn't until Monday. I just want a better idea of where we sit on this.
Thanks for reading and for any input you can offer!
--Kim
Hi Kim1220,
Yes you can use alt credit for a USDA mortgage and as long as you have 12 months to review you should be fine. What is the status of your residency?
Yes, the USDA loan program will allow you to roll the closing costs in to the loan as long as the appraised value will support it. For example if the purchase price is $85,000 and the closing costs are $5,000, you can roll them in as long as the home appraises for at least $90,000. Unfortunately the USDA program will only the closing costs to be included in the loan so you will not be able to pay for painting or anything else with the loan.
Yes you can use alt credit for a USDA mortgage and as long as you have 12 months to review you should be fine. What is the status of your residency?
Yes, the USDA loan program will allow you to roll the closing costs in to the loan as long as the appraised value will support it. For example if the purchase price is $85,000 and the closing costs are $5,000, you can roll them in as long as the home appraises for at least $90,000. Unfortunately the USDA program will only the closing costs to be included in the loan so you will not be able to pay for painting or anything else with the loan.
Thanks for the reply! I'm an American citizen and my husband is here on a PR visa, so there wasn't any problem with that. We had our "interview" and got pre-approved for an RD direct loan at our local USDA office. We filled out the official application and paid the processing fee, which was $34 at our office. We were told that our application would be processed within 30 days at the most, but that they would try to get to it sooner than that.
I thought I would go ahead and post a list of all of the documentation we needed, including documents that served as alternative credit references.
Documents:
W-2's for the last two years
Tax forms for the last two years (for myself, as I'm self-employed)
Three credit statements from different companies saying how long we've used their services and that we never made late payments (we used rent, electric, and water)
Social security cards
Photo ID
Permanent resident card (for my husband)
You will also need award letters and monthly amounts for food stamps, SSI, or any other gov't money that you may receive on a regular basis.
General Info Needed:
Hourly or salaried wage information (we didn't have to provide pay slips to back this up with as they are going to verify this when they call the employer)
Contact information for landlord
Employers' names, addresses, phone numbers, and monthly income for the last two years
Bank account information (name, address, and account number)
Hope this info helps others in the same position as us!
--Kim
I thought I would go ahead and post a list of all of the documentation we needed, including documents that served as alternative credit references.
Documents:
W-2's for the last two years
Tax forms for the last two years (for myself, as I'm self-employed)
Three credit statements from different companies saying how long we've used their services and that we never made late payments (we used rent, electric, and water)
Social security cards
Photo ID
Permanent resident card (for my husband)
You will also need award letters and monthly amounts for food stamps, SSI, or any other gov't money that you may receive on a regular basis.
General Info Needed:
Hourly or salaried wage information (we didn't have to provide pay slips to back this up with as they are going to verify this when they call the employer)
Contact information for landlord
Employers' names, addresses, phone numbers, and monthly income for the last two years
Bank account information (name, address, and account number)
Hope this info helps others in the same position as us!
--Kim