Do Not Accept Offers from Buyers Pre-Approved for USDA Financing

By
Real Estate Mortgage Broker with Treasury Mortgage | Mortgage Company - New Jersey

Thumbs DownShould Realtors Advise Their Clients to Not Accept Offers from Buyers Pre-Approved for USDA Financing?

If you don't know by now, USDA plans to be out of funds by the end of April of this year. So the question begs to be asked; Should listing agents advise their sellers go under contract with buyers purchasing using a USDA mortgage?

Without doubt there is a portion of buyers that can only finance a home using 100% USDA financing. Even the 3.5% FHA required down-payment is too much for some buyers. So should buyers be required to also be approved for alternate financing? Some lenders refuse to even write these loans out of fear. Or maybe ignorance.

With the first time buyer tax credit coming to an end soon, and most likely the number of home buyers thinning to some degree, all bases should be covered. At the very least a lender, buyer, and Realtor should all be on the same page and have their buyer's facts disclosed. If a buyer can only utilize USDA financing, then everyone needs to notified of how fast things must move, and the potential negative consequences.

Thumbs UpUSDA financing is a fanastic program. Denying a home buyer and seller to go to contract out of fear can be just as bad as going into a contract blindly. Lay out the facts; No surprises for buyer or seller. Keep the lines of communication constantly open. The reality is that you may have only one buyer to ever go under contract for a particular home. Can you risk saying "no"?

Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

  • NJ First Time Home Buyer
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  • Conventional, FHA, USDA, VA, HMFA, First Time Home Buyer, Police and Fire, Live Where You Work, and more

Call direct @ 856-419-3561 | Subscribe to Steve's blog via e-mail | NJ Loan Officer .com

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Treasury Mortgage - 550 Bridgeton Pike, Mantua, NJ 08051 - 1810 Springdale Road, Cherry Hill, NJ 08003

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  1. Bridget Cella 03/24/2010 07:29 PM
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Comments 16 New Comment

Rainmaker
1,202,249
Carla Muss-Jacobs, Principal Broker/Owner
Buyer Focused ~ Buyer Results
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time

Something the listing agent should know, absolutely.  And BUYER AGENTS need to talk to their clients about this type of funding too.

March 24, 2010 01:14 AM
Rainmaker
710,803
Jackie Connelly-Fornuff
Century 21 AA Lindenhurst NY
Long Island NY Real Estate Agent

Hi Steve, I never came across those but it's great to know about so thank you!

March 24, 2010 05:40 AM
Rainmaker
76,208
Bridget Cella
e-Pro, Realtor
Re/Max Connection

Thanks for passing this on!  Great info especially for those towards the shore (not at the shore).

March 24, 2010 07:28 PM
Ambassador
167,680
Jon Sigler
Connecticut FHA VA USDA Mortgage
lagstar Bank, NMLS#119288

We should all contact our congressmen and women and tell them how much of a priority it is to increase the funding available for USDA loans this year and to do so before the current funds run out.  We all stand to benefit if more funds are made available for USDA buyers.  

March 24, 2010 07:41 PM
Rainmaker
265,466
Chanda Barrick
in referral
Keller Williams Indy Metro Northeast

It's interesting to see the homes/areas that qualify for these loans.  We've got a very affluent area just north of us that is just as congested and built up as being right here in Indy (nothing rural about it), yet they can get USDA loans.  If the USDA were not going away, they would definitely need to reevaluate what properties qualify for this type of loan.

CHANDA

March 26, 2010 07:52 AM
Rainer
288,801

Steve Kappre

NMLS# 217008 Mortgage Loan Officer NJ 856-419-3561
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