Rural Development direct timeline?

[nomoneynomore]

I've been doing some research and the more I read the more scared I get. Some of these loans are taking months!

We are in Kansas and already have our loan approved by our local RD office. We signed the purchase contract last Friday and the inspection is scheduled for this Thursday. RD told us to put a closing date of 90 days on the contract. RD did tell us that funds had just been released a week or so ago, I'm not sure how much of a difference that makes.

Can anyone tell me what their experiences have been with RD direct? I know I can't bank on anyone else's situation, but I'm hoping someone has some positive experiences!

[Sweetpea3829]

Timeline=forever.

I gave you some info on our experience on your last thread. Congrats, btw, on being under contract and approved through USDA!

I really don't have any idea why the process has been so painful. If I didn't know better, I'd think the underwriter for our loan was intentionally trying to delay things. But that can't be.

Right now, we're anticipating ANOTHER delay because our underwriter refuses to order the title search. Why? Because the house failed septic and we're waiting on the plans from the septic engineer. She won't order the title search until the septic issue is resolved.

Which means we're probably going to be at least 4-6 weeks from closing. From today. We went under contract in early April.

Ridiculous.

Buckle your belt and hold on for the ride. Maybe you'll have a better experience, I hope you do. But so far, I've not read many good USDA Direct stories. Just months and months of aggravation. It'll be worth it in the end though.

Sadly, the aggravation has managed to completely suck the joy out of the house-buying process. We were really really overjoyed to be buying. Now? Now we're wearied, tired and just sick of the whole thing.

[nomoneynomore]

I'm so sorry you are still dealing with this! What makes RD loans so much better than FHA? I know we don't have to have a downpayment, our interest rate is a bit better (4.25 vs the 5% FHA was) and that it is 33 yrs vs 30 years. Am I missing something? I have heard several stories about people getting help with downpayment or their monthly payment, but I'm assuming we don't get that. Our RD loan will be $471/mo vs $531/mo for FHA and we don't have to come up with the $2000 for the down payment. I'm starting to wonder if it is really worth it. If we sold our camper we could pay the down payment and pay off one other loan. While I hate the idea of selling the camper, I hate the idea of living at my parents house in their camper for another 60 days or more. Don't get me wrong, I'm thankful we have a place to stay. I know I've become overwhelmed by this whole situation. I just want to be done!

[Sweetpea3829]

Well, for us, the appeal of sticking with USDA Direct is that we know we qualify for the subsidized 1% rate. This will lower our payment substantially and allow us to continue paying the higher payment and pay off the loan faster.

That's the plan anyways. :-)

We, too, are sick of the whole thing. I swear, I think our underwriter gets up every morning and asks herself, "What can I do today to delay their loan?"

Frustrating, to say the least.

[nomoneynomore]

Did they tell you up front that you qualify for the better interest rate or payment?

[Sweetpea3829]

No. Actually, techinally right now we don't qualify for the lower rate. The loan is written at the regular fixed rate. Then, any time during the life of the loan, if you qualify income-wise, the loan can be subsidized down to the 1%. BUT, there is a recapture on that subsidy when you sell.

Right now, our rental income from our other property puts us above that income limit for subsidy. But, we're going to losing that rental income soon. This is why we don't switch to usda guaranteed. There's no subsidy in that program.