By Bridget McGee

Maryland and Delaware USDA Loans-NEED MORE THAN 30 Days!

USDA Loans are great loans that offer no money down financing to folks purchasing in Rural communities. You may be surprised to know that this does not mean that you must purchase farm land. Property eligibility is determined by the density of the population.

As you might imagine, in Maryland, Baltimore City does not offer any USDA financing. Much of Carroll and Frederick Counties qualify for no money down financing with USDA. Parts of Baltimore, Howard and Prince George’s County also qualify for no money down financing with a USDA loan. Most, if not all of the counties in Western and Southern Maryland qualify for USDA financing with no money down! In several counties almost the entire county qualifies, in others, a small part of the county qualifies.

United States Department of Agriculture
Rural Development

To determine if a property you are listing or have a buyer for will qualify for USDA financing, check the eligibility here, or talk to your lender. If one property does not qualify, be sure to check surrounding areas. I have seen cases where one side of the street qualifies while the other doesn’t!

It is important to note that there are two calculations for income eligibility. A buyer must qualify for the program and for the loan. For the program, the income of all members of the household 18 and older will be used. For the loan, only the borrower’s information is used. To help a buyer determine if they may qualify for no money down financing using a USDA Rural Development loan, check eligibility here. The lender will need to re-verify the income eligibility.

Once the lender reviews the loan for approval, the loan is sent for a 2nd look by USDA.

We just got this notice from our underwriting team forwarded from the USDA Delaware/Maryland State Office:

Your file has been received by the Delaware / Maryland State Office.

Our turn time is 30 business days from today [5/22/2014]. Please do not schedule a closing date until after you are in receipt of a Conditional Commitment from USDA.

If everything is complete and we are able to approve, a Conditional Commitment will be sent to the Lender Contact listed on the submitted RD Form 1980-21 Request for Guarantee.

We will not respond to any status requests at this time as we are trying to strictly honor the 30 business day turn time.

Realtors and Buyers PLEASE be aware! As of this writing, Maryland and Delaware* USDA Loans WILL need purchase contract closing dates at least 45-60 days out. This is NOT a lender issue, it allows extra time for the 30 day USDA review. If you have loans in process, please be sure to check with your lender, as contract extensions may be required.

*Other States will need to check with their loan processing center.