Financing in Eagle Mountain>Question Details

Lauren, Home Buyer in Provo, UT

Direct vs. Guaranteed?

Asked by Lauren, Provo, UT Wed Dec 14, 2011

We are looking into getting a USDA loan to purchase a home. I have spoken to a lender who said he'd run our information and get back to us about whether he can pre-qualify us for the guaranteed loan. The concern being that our credit is below 640, but above 620. I was on the USDA website just now and it looks as though we are also eligible (just barely) for a direct loan. What are the advantages with one vs. the other? I called the local USDA office, and they told me that it would be 3-6 months before I received word back on eligibility once I apply. Does that sound correct? Should I just go guaranteed so I can begin house hunting sooner?

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Unless you fall in the "very low income" category you need to go with the Guaranteed program. You should be able to close in 30 to 45 days if your lender knows what he is doing. The Direct program can be a nightmare because you are dealing with the Government!
1 vote Thank Flag Link Wed Dec 14, 2011
USDA has certain guidelines and then lenders must fulfill those guidelines as well as their investors guidelines. So there can be lender overlays that make even more stringent criteria. It may be easier to raise your credit score by 20 points then wait to go direct. There are income as well as geographic limitations so make sure you get the best advice possible. Let me know if I can help.

Juston Puchar
1 vote Thank Flag Link Wed Dec 14, 2011

The lender that I work with said that it would be really hard to answer your questions online, but that you are welcome to contact her and she would be happy to answer your questions with no obligations. She does USDA financing in Utah County all the time! Her name is Jacinda Montano at 801-847-5810. She is the best lender that I have ever worked with!

Kristi Hutchings,
@Home Realty Network
Wendy K Team
Web Reference:
0 votes Thank Flag Link Thu Dec 15, 2011
Best advice; find a good local Mortgage Broker to work with. Cost nothing and they are paid by the lender on close of the transaction.…
0 votes Thank Flag Link Wed Dec 14, 2011
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