Financing in Great Bend>Question Details

Alquinn, Home Buyer in Great Bend, KS

Pre-approved for a rural development loan than less than 24 hours before closing get a call saying i was denied the laon. can they do this?

Asked by Alquinn, Great Bend, KS Mon Apr 12, 2010

I got pre-approved for an rd loan from my bank. In my contract to purchase the house it said that loan company must send approval by march 26th. My bank did this. My closing was scheduled for April 9th. On April 8th at 3:30 pm I got a call from my bank saying that rd hadnt signed off on it and closing was going to be moved to the following tuesday but nothing was wrong with my loan. A hour later i get another call from the bank stating i no longer had a loan. that it was denied because i am on a 6 month probation at work(normal for my job). My question is......the bank approved me but rd didnt...shouldnt the bank have to keep their word?

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Answers

2
It's not a question of whether the bank should "keep its word." Just because your bank's underwriter approved the loan doesn't mean USDA will. All USDA Rural Development loans are subject to USDA review and approval before funding. However, USDA will not review a loan application unless it has been approved by a lender's underwriter.

The fact that your current position is probationary indicates two things: 1) you recently took this new job - that in and of itself is not a reason to deny the loan; and 2) because you're in a probationary period, you can be let go anytime in that time frame for any reason, That's most likely the reason USDA declined to approve the loan.
0 votes Thank Flag Link Tue Apr 13, 2010
Hi, Alquinn,

If you were applying to use the USDA loan, the denial may be because Congress has yet to re-authorize funding. The program is out of money. If that is the case, your bank should have locked you in when money was available. You might ask your congressman or Senators why they are holding it up?

Doc
0 votes Thank Flag Link Mon Apr 12, 2010
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