No Money Down OR – WA – CA

Recently I have seen examples of USDA Rural Guaranteed Mortgage Loans that were turned down by USDA for reasons that have not been an issue previously to my knowledge. What this points out is that with the increased interest in USDA Rural Guaranteed Mortgage Loans as one of the very few 100% financing options out there, the review process is getting stricter. So, if you are looking for a no money down loan, you should be prepared for the extra scrutiny during the process. 

One of them had to do with an outbuilding on the property. It was a detached garage/shop of over 1000 square feet and the USDA underwriter did not like it since garages are “typically about 400 square feet.” This was a surprise to me, since I thought that outbuildings were normal on “rural” properties. However, USDA’s attitude has to do with the potential of using the property as income generating and a shop of this size could be used that way. So, a property with any type of outbuilding will be looked at very closely. Also, acreage is very closely watched. It is a rural program, but designed for rural communities, not necessarily small acreage parcels.

 The other issue has to do with debt ratios. We have an automated system called “GUS” that underwrites the USDA loans and in the past if we got an “Accept” from GUS, the ratios were acceptable, even if higher than standard. Now, it appears we are being more closely monitored and a housing ratio over 35% will probably be denied. This is not a hard and fast rule, but could be an issue.

The unfortunate part of this is that it is taking 30 days to get the denial back from USDA currently, but we are hearing rumors that their turn times in this area could be improving. We certainly hope so. If you have questions about USDA Rural Guaranteed Mortgage Loans, or would like to proceed with an application, contact me today at 541-342-7576/541-221-3455 cell or e-mail me. You can also come into the office, Alpine Mortgage Planning, 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. I am here to help you in the process. The program is great for Cottage Grove, Creswell, Junction City, Veneta, Florence, Oakridge, Westfir and Harrisburg.