Can I purchase a short sale with a USDA loan with the possible area-based changes in law?

Asked by ChelseaMcV2, Sumner, WA Sun Aug 26, 2012

I am approved for a USDA loan and aware of the rural area requirements but the agent I've spoken to has alluded to the fact that a short sale on a USDA loan is nearly impossible. I was also told by the loan officer that it was "rumored" that several areas I'm interested in are going to be no longer considered USDA rural areas as of Oct 1st. Does this mean the long duration of purchasing a short sale would push the transaction so far into the future that this is what would render a short sale something impossible?


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Jirius Isaac, Agent, Kenmore, WA
Mon Aug 27, 2012
First of all, I am representing a client right now as their buyers agent & their loan officer for a purchase in Preston-Fall City area & the loan is USDA. So, no problem there. However, if the house you are interested in changes to not being in the new USDA area, that would be a problem. The approved areas have not changed for several years, so once they change it should not matter how long the short sale takes. If I can help you with anything at all, let me know.

good luck, Jirius Isaac
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James Gordon…, Agent, Hamilton, OH
Sun Aug 26, 2012
Chelsea you need to be approved by the underwriter before the file is sent to USDA. Currently USDA is running 25 days for approval in my area. To get a short sale approved and approval by USDA by Oct 1 is not something that is going to happen in my opinion.
Yes USDA is changing the map effective Oct 1 based on the 2010 census.
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