USDA nightmare

MN Gardener · #81 07/05/11, 11:08 PM

Actually, the USDA Rural Dev loans are really nice for someone in your situation. Not very many lenders will do construction / rehab loans with no money down. The down side is that not very many people qualify for the rehab loans. The reason they are requiring you to sign something saying you are / do not work is because of the income limitation. If you work outside the home for $$$ you may end up making too much money (ie: you are no longer low income). As far as signing a no ag certification. As I posted above, it is probably because of the redemption / foreclosure problems. I was just talking to a local banker in our area and they are starting to do this because it is so hard to foreclose on ag properties. I know it is a pain, but what they are asking isn't really all that unusual.

MN Gardener · #82 07/05/11, 11:11 PM

Quote:

Originally Posted by subman

My wife and I just closed on a USDA Rural Housing loan last month fastes close we have ever seen 15 days and didnt have to sign anything about not farming it in the future. we are going to have a steer or 2 and a few pigs and chickens and a garden but none of this for profit. otherwise it was a great loan and process and i am eligle for a special type of VA loan for disabled vets and i still went with the USDA much smoother and faster.

I am not sure what state you are in, but some states have a real estate tax exemption for some disabled vets (70%+ in MN). You may want to call your assessor's office and see if your state has this program.

billooo2 · #83 07/06/11, 08:26 AM

OOPS!!!!......meant to start a new thread.....

ErinP · #84 07/06/11, 03:27 PM

Quote:

Originally Posted by luvrulz

I agree, call Farm Credit Services and then call Farmer's Insurance! Best way to go for the loan and the needed insurance..... We got a fixed 15 yr loan and they've dropped the rate substantially twice in less than a year.

We have a 10yr with FCS and while I've been VERY happy with the quality of our loan, as well as service and those annual paybacks (I'm blanking on the term for that), they require 33%(?) down on the land's value.
That is, they assess the property value, and then loan 66% based on that.

Ie, our land, which sold for $400 an acre, was assessed at $225 an acre. FCS loaned us $6K for the their two thirds, and we had to come up with the other $10K.
In our case, we're talking 40 acres for $16K. It was cheap enough that the actual numbers worked. But someone who is looking at something more expensive might have a harder time coming up with their third, as well as the difference between value and actual cost.

Just something to keep in mind.
Like I said though, I've been really happy with the actual loan itself, though.