Any homesteader USDA loan program gurus?
 

I have an atypical question I can't seem to find an answer to! I have land at my disposal. My parents are on the paperwork and buying it from a landowner who finances in house. I am paying half the payment and half will bbe mine. They are willing to write up papers showing this. I just want to get a USDA loan to put a home on the land. Is that allowed? Or do I have to get put on the land paperwork? If so, is it just ok if my name is on it.....or do I have to be the only name on it? I already know it is in an eligable area and my manufactured home dealer is USDA approved.

To clarify: i just want the loan for the home only.

You may be able to get a fha loan.(farmers home administration)

My recommendation is to contact a mortgage broker that handles USDA loans. My broker was most knowlegable about USDA loans and made sure that the process was completed to every ones satisfaction. Due to my credit history, the entire transaction took over a year as I rebuilt my credit, and he was there every step of the way.

In my experience the USDA is not only hard to work with on loans, they also are not keen on loans for facilities that will be placed on land that is in joint ownership. In this case you own "half" of the land, but want a mortgage for the house on the land. My understanding is that they would require the land that the house was built to be in the name of the person owning the house.

From my understanding, they won't do a loan for new construction. I could be wrong tho.

Yes. I already confirmed you can do construction. The problem I have is the owner of this mortgage company told me on the phone it was ok that this was my parent's land (when I was preliminarily calling around). He was aware I was looking for USDA funding. On saturday I talked to one of the mortgage lenders who asked if the land was deeded to me yet. She seemed to think that same owner told her to make sure land is in my name. She was unsure if I could have it with my name on it with others. I told her that her boss specifically told me it wouldn't be a problem (hence, the reason I went forward with an application and pulling my credit). I am getting red flags. She is supposed to call tomorrow after asking him again. Also, she told me I would only need approx $1500 for closing costs and the like......now she is asking if I can have 3 months in reserves. I was like "3 months of what", she said "about $3000). Which is NO! As I have seen many people get these with no reserves AND if appraisal was high with only a few hundred out of pocket. I need to start calling around, it looks like. My credit is 696 TU FICO. I make 70,000 a year and have no forclosures or bankruptcies. Minor credit dings (such as old cell phone, old apartment that I am disputing because they totally lied, etc). My debt to income ratio is low. So it went from "it's no problem if it's their land and plan on having about $1500" to "can you have reserves , and, i *think* it needs to be in your name". Just seeing if anyone has a straight answer for me, because I am starting to get red flags on this company...... :(

Does't really matter what one guy says. If the USDA wants you and you only on the deed that'ss the way it has to be.

The whole plan sounds like a snake pit of trouble.
With the land owner financing the land, he holds the deed to the land. I call that a Land Contract. Very common in bare land. Sounds like the deal is between your parents and the landowner. Your parents are willing to split the property, give you your portion, when it is paid off. Right?
You want to borrow money to buy a manufactured home, put in electric, septic, well, driveway on the land your parents are buying from a guy that holds the title.
How does FHA repossess anything that sits on land owned by the guy holding the deed? If your parents default on the Land Contract, how do you save your home and how does FHA protect themselves? If the land owner gets sick and has to take out a loan on everything he has a deed to, he can borrow against the land. A default by him causes the land, plus everything attached to it, to go to whoever he borrowed the money from.
Bottom line, I don't see anyone, not even the government, loaning money for improvements on land you don't own and they can't control.
The only solution I see is to borrow the money for the manufactured home, well, septic, electric, slab for the manufactured home, driveway, PLUS all the land. That way the deed holder gets paid in full, turns over the deed to the FHA, you make payments to FHA and your parents help you out whatever way they chose. They may want to be on the loan as borrowers with you. The land owner might not want an early pay off. Lots of twists and turns. Lots of assumptions on my part. Figure out a way to clean up the transaction or I doubt anyone would handle it.

I know that. What I was just trying to find out is the USDA rule on that. As I can't find info on it. Since the USDA qualified lender originally told me I don't have to be, but the lady I am working with "thinks" I do, but doesn't know for sure (she was going to talk to the owner today).

I wouldn't mind taking out a loan on the whole thing. Just have to find out if it is as simple as just adding name to land contract (which I have ability to pay whole thing if parents couldn't....I am paying half now), or having whole thing transferred to my name. The land owner has been doing this for 35 years. Has a very good reputation. I don't forsee his losing land he is selling.

It's a land contract not a mortgage? I think from a USDA standpoint it is Game Over since you don't have title to the land.

I know USDA will finance land and home. So it would pay off the land owner. I would like to do just the home if possible, but second choice I will put the land on there. Now, it *does* make sense to me that if they also finance the land, I would have to be on the contract as buying it. But (again) I would like to know if I just have to be on it....or the ONLY one on it. I understand from another poster how it would be viewed as a risk to finance the home that is on land my parents are paying for. However, I havent found out yet the actual official rule for that, though it appears likely not. When someone buys land from this guy (again, this is his business. He is well known in this state, reputable, and buys land, improves it, sells it off for 35 years now), they can finance it through a bank, through mortgage companies that will finance land, or through him. The only reason I am not on the paper work is after weeks of trying to get off work on the same day to go sign the paperwork, I just couldn't and told them to just go ahead. The plan was always to either just deed half to me when paid off, or just get me up there on a day I can get up there and put me on the paperwork with them at the owner's office.(It's an hour away and I work a lot-can't always just hop over there during business hour,nor can my mom and dad) Either way, I am just looking for the official rule from the USDA, and it looks like I won't know until I can talk to the lender again on my lunch break :) I was just hoping someone knew USDA rules well and I could find out before then.

Personally, I would look at Farm Credit Services before USDA. The down will be higher, but the interest will still be low. And you're much more likely to get it.
It's a fairly standard loan procedure, rather than tied up with government red tape...

That's who financed our ground when we bought it.
However, no matter who you go with, you're going to have trouble getting a penny for something that is jointly held. You would probably be better off getting your folks to have a survey and break off some specific area for you only.

Update: was happy to find out that all I need is to be added to the deed/contract. This is without financing the land in. The good news is, if my parents ever have trouble with the payments (unlikely), I can afford the entire payment. But we are looking at the possibility of putting it all in my name if financing it wont make my monthly mortgage through USDA outrageous. I am so relieved!

Absolutely no way. The land has to be in your name to get a mortgage.

FHA is federal Housing administration

The land has to be included.
Also, adding you to the deed is opening a big can of worms since your parents will still be on the deed. If that's the case, they'll need to sign on the mortgage.

What you need to do is get your portion of the land deeded to you only. BUT, unless the guy doing the owner financing gives you a free and clear deed, you'll have to pay him whatever it takes to get a free and clear deed. That amount could be financed in the USDA loan.

You will not get a loan to build a house, unless land is included.
Only other option is to buy a manufactured home with financing that does not include real property. Your rate will be higher and may need money down.

I am getting a manufactured home. I have had 2 companies already tell me I can finance just that. And the landowner is going to rewrite the papers this weekend. Just a small administrative fee. I spent all day working on this yesterday. If it turns out both mortgage companies and the bank is wrong and I have to finance the land in, the landowner and my parents already agreed to put it in my name only. But I don't know why the bank and both companies would tell me I can finance just the home

Ignorance on their part and lack of training.
Here's USDA's web site. You might want to locate your regional office and review income guidelines. Menu is on the right,
Good Luck.

You have too many things going on. You want a home loan for a home that will be placed on someone else's land that is being bought for contract for deed. Those usually have a 3,5,7 year balloon payment. Then you have to refinance.

Ok, we figured it out. YES there is a way for USDA to finance my home only. But it involves so much more paperwork and checks that it is hard to get approval on. I went through pages and pages of boring rules and regulation on the USDA/RUR dev website. Finally found it just as lender called to say they found out it *could* be done, but a lot of effort. Especially since the amount owed on land is small (1 year left of payments). So after many phone calls on both of our's part, we can finance them together with EITHER JUST my name on it OR mine and my parents. I got it in writing in case. Either way, we got this, got the info we need, got me set up on the paperwork, and moving forward. After a stressful week. So it's not even a question anymore.

I see where the farmers home administration was terminated in 2006.Many rural homes were financed through them in past years.You are correct with the present fha.

But were known as FmHA.

Financing a MH is different than a built home. A MH can be repossessed, just like a car or snowmobile. A built home isn't portable.

If it's put on a permanent foundation, on his property and taxed as real estate, financing is about the same as stick built.

I can finance a MH in a trailer park. But if I built a house on property I do not own, I know of no one that would finance it.

That's correct and I have stated that several times in this thread.

Actually, the finance company the manufactured home place uses would have required only a document written up that states I pay them for a portion of the land, how much, and for how long. But, I don't have to worry about all that. As of now, I am on the land paperwork, underwriting and mortgage company satisfied, and all is moving forward. I know several have asked me, why?. Now your parents have paid off land and owe nothing". No....they will be continuing to pay me until they are paid off in what they still would have owed. And still contributing to half the property taxes and still upkeep on their side. I wonder what kind of family other people must have to think my parents are just sitting back, heaving sigh of relief, that they "got off scott free". sad, I guess. This works for me. We all have a lot of work and time invested in this land...as well as money. In the end, I am lucky. As, if hard times were to hit me, they would not let my mortgage payments get behind. It takes a village. And a small village I have :)

Do you have siblings? Things can change in a heart beat if something happens to your parent (s). Been there done that! Sorry for the drift, just be sure everything regarding this is air tight legally.

Be sure to read the fine print and make sure they're not going to make you put in a new well, control your fencing, etc. I've looked at loans with the USDA and FSA. Sometimes the contracts give them too much control so I forgo.

One sister. She HATES this part of the state. Kind of snobby about it and would rather pay a lot more for less land somewhere else.Was even offered 5 acres of land for free out this way (by a friend of hers who has tons of land he never uses) and didn't take it. You have got to hate this town seriously to turn down free land! Has been asked REPEATEDLY if she is SURE she doesnt want to move out on it. She is adamant. In fact, she is about to buy her own parcel of land in a couple weeks out right, break it up, sell it off. Then use the profit to buy land about 70 miles away!