Understanding the USDA Mortgage Process

The USDA home mortgage process is almost the same as with a conventional home loan that you apply for from a private lender or a bank. The only fundamental difference between a conventional home loan and a USDA backed loan is that you have to submit the latter to a USDA field office in your state in addition to a mortgage lender or a traditional bank. Once, you already filed the necessary paperwork, then a bank underwriter will review the file and then submit the mortgage application to the USDA Field office. They will then review your mortgage application for final approval. Once the USDA field office has fully reviewed your application, you will then be notified if you are eligible for a loan or not.

However, if the lender or the agency that you are working with doesn’t have any Pre- Qualification application form, then they may be able to start the USDA Loan Application process instead. They will then review your file and then if you’re qualified for the loan based on the USDA eligibility guidelines. The guidelines include the income eligibility guidelines, credit eligibility guidelines, and the property eligibility guidelines. The property has to be eligible for a USDA backed loan for your application to be approved. The property should be located in a town or a rural area that has a population of at least 20,000 residents. Your income should also be less than 115 percent of the average American in the same county. The lender will also check your credit history and also your current income to determine if you are capable consistently making payments on your loan. Once you have been notified that you’re eligible for a USDA home mortgage, you may then be able to request to have the current mortgage interest locked in and also request for a home appraisal.

Once the home appraisal has been completed, you should now gather the necessary paperwork and documents and have them prepared for the underwriter to review. Once the underwriter has completely checked all your documents, your lender will then underwrite the USDA mortgage and then submit it to you’re a USDA Regional field office within your area for final approval.

Once the USDA local field office already has your loan application, it will then be carefully reviewed. The local field office will also check your financial information together with your credit history before they can have your request approved. The whole process will take at least two days or even up to two weeks, depending on the number of loans that they are currently processing at your local field office. The USDA will either approve or reject your loan, depending on the documents and the paperwork that you submitted. Once approved, your lender will then draw up the needed papers and your mortgage will be released the day you sign and close on the home.