Traffic Jam At Rural Development
USDA Rural Development – RD program backlogged!
**** As of 1/16/2014 the backlog is nearly worked thru and turn times are running approx 2 weeks.
Just wanted to make sure everyone is aware of the backlog at rural development. The process for lenders originating RD loans is the following:
- Lender works up and underwrites file (appraisal, title work, income & asset verification, etc. . . )
- File is submitted to Rural Development for their blessing
- Loan closes
Step 2 is the hold up right now and it affects all lenders. The problem is that historically RD turn times were around 1 week. For awhile they were up to 2 weeks and we thought that was bad, but still not all that news worthy. Currently RD is looking at files submitted to them on the 15th of last month! That’s right they are running roughly 30 days. Whats that mean to you. When your structuring those purchase contracts make sure you allow for a 60 day close time on all buyers obtaining RD financing. We are making every effort on our end to get the file up to them and in line as quickly as possible but for at least the foreseeable future make sure you plan a 60 day close.
With that said RD is still a great program. More info here Some highlights include:
- Zero Down
- Low monthly mortgage insurance (PMI)
- Ability to finance closing costs into the loan
- Ability to finance repairs into the loan
- Visit RDArea.com for a map of eligible areas
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S.O.S. SAVE OUR SALE
S.O.S. SAVE OUR SALE: WHAT TO DO WHEN YOUR LENDER STALLS WEEKS BEFORE CLOSING!
Did your mortgage lender suddenly go radio silent, request the same bank statement for the fourth time, or drop a last-minute loan denial right before your scheduled closing date?
Yesterday, a panicked real estate agent called my office from Portage. Their buyer had been under contract for three weeks on a home near Milwood. The closing date sat just nine days away.
Out of nowhere, the buyer’s out-of-state call-center lender issued a denial letter. The call-center underwriter miscalculated self-employment write-offs, panicked over an unpermitted porch repair on the appraisal, and threw the entire transaction into the trash can.