7 Step USDA Quick Close
USDA Loan Application 7 Step Quick Close
Posted by Paul Dunn
It wasn’t too long ago when closing a USDA Loan Application would take a minimum of 45 days and sometimes 60 days or more. No matter what, closing the USDA Loan would always take longer than closing a good old fashioned conventional loan. Why? Because a lot of mortgage companies just were not familiar with the product.
There were too many challenges:
- USDA Loan underwriters were not really in existence. Many lenders would pull FHA and Conventional underwriters and try to teach them how to underwrite for the USDA Loan. Unfortunately, anytime there would be an area that was not black and white, they would revert back to their knowledge of FHA or Conventional loans which translated into fewer loan approvals and longer underwriting times.
- Mortgage company processing and origination software was not built with the USDA Loan in mind. Most of the popular processing programs would show a negative number as a down payment and as you can imagine, a negative down payment is not something most processors have seen or know how to address.
- Industry professionals were just not familiar with the product.
- Any time the media would report that the USDA has run out of money, buyers would assume that the program was no longer available and many loan originators would just stop offering it as an option. At the same time, a majority of lenders stopped funding the USDA Loan, while many direct USDA Lenders would keep on funding them based on the fact that Commitment Letters could be obtained from the USDA in lieu of the USDA Guarantee.
So I found a mortgage company that had the framework and automation systems in place to be able to fund the USDA Loan in as little as 10 days.
The USDA Loan Framework
The entire process from Application to Funding is under one roof. This is 75% of the blueprint for being able to fund a USDA Loan fast:
Being a Direct USDA Lender
In house Processing services (we don’t use contract processors)
Having an in house USDA Underwriter within 40 feet of my office (we don’t ship to an outside lender)
In house Closing Document Services (we don’t rely on outside service providers)
In house Funding (we don’t rely on outside funding to fund our USDA Loans)
We use an online Automated Origination System that gives you a Direct Connection to your file:
24/7 access to your loan file
Secure password protected account
Daily Loan Status Updates emailed to you and your agents (every party knows exactly what is needed next)
The ability to pull your own mortgage credit report at the time of application (speeds the submission process)
Access to upload, view or even download any document in your file
Use a bar coded fax coversheet to fax documents directly into your file (immediate alert sent to processing)
The 7 Step USDA Loan FAST Close process
Step 1 – YOU Gather Your Information – Time to complete: 0 – 2 days – Prior to applying, you’ll find that things go quicker and smoother if you are well prepared. So you’ll need to gather all of your information that will be needed for your USDA Loan. If your information is in electronic form, create a file in your computer and save it there for easy upload. If your information is on paper, be sure to keep it all in an easy to access file at home. Here is a basic list of items you will need:
> Asset Documentation – This includes bank account statements, retirement statements, brokerage account statements, etc.
> Income Documentation – This includes pay check stubs from work, two years of tax returns and W2 forms. Generally anything that will document income over the last two year period.
Step 2 – YOU Apply Online – Time to complete: 10 – 20 minutes – Create your online application account and use the information you gathered to complete the loan application. Store your username and password in a secure place. You can always access your account through this website. If you have your documentation stored on your computer, upload it into your file. If your documents are paper, print out the bar coded fax cover sheet and fax them into your file.
Step 3 – YOU Do The Credit Pull – Time to complete: 5 – 15 minutes – You can pull a copy of your credit report that will be imported into your USDA Loan file by following this link: Get Your Credit Report Now. Pulling your own credit will speed up the process and it can be done any time of day plus you will get an instant copy of the Credit Score Analyzer. We use Advantage Credit International for our mortgage credit reports.
Step 4 – WE Process Your Loan – Time to complete: 1 – 10 days – Once your application, documentation and credit have all been uploaded to your file it is reviewed for submitting to processing. If there are any questions or further needs, you will be called and emailed for the missing information. The more complete your file is in the beginning, the faster it will sail through processing. This is also when we order the property appraisal and prepare the loan for underwriting.
> Additional information to upload or fax in would be contact information for your insurance agent and for the home owners association (if applicable)
Step 5 – WE Underwrite Your USDA Loan – Time to complete: 0 – 5 days – Once our underwriter issues an approval, portions of the file will be sent to the local Rural Development office to procure the USDA Guarantee or the USDA Commitment Letter. As with processing, the more complete the file is in the beginning, the faster it sails through the Underwriting phase.
Step 6 – WE Prepare Closing Documents – Time to complete: 0 – 2 days – Once we have a clear USDA Loan approval from the Underwriter and the USDA Guarantee from the local Rural Development office, we can prepare closing documents. Something to keep in mind here is that Real Estate Agents like to schedule closings near the end of the month, so if there is going to be a backlog in the closing department it would be near the end of the month.
Step 7 – YOU Sign Docs; WE Review And Fund – Time to complete: 1 – 3 days – Once you have scheduled your closing appointment you will have the opportunity to review the Final HUD Settlement Statement before going to the signing. After you sign, the Closing Agent will send the closing package back to us for review. As long as the closing instructions have been followed, your loan is ready for funds to be released.
Step 8 – YOU Get The Keys To Your New Home – Step 8 is the best part of our USDA Loan 7 Step Quick Close system. Be sure and send pictures after you move in, we love helping families get their first or next home!
You can start your USDA Loan Application by clicking the APPLY HERE button on this page.
It is important to note that the time frames listed here may vary depending on market conditions, buyer preparedness and seller cooperation.