Below we will discuss the time frame for USDA Rural Housing loans in 2016. How long each step takes and what home buyers should expect during the process. Keep in mind the timeframes listed below start AFTER a buyer has a fully accepted contract to purchase a home. The initial USDA pre qualification process (before contract) only take about 20 min to complete, please contact us for more details on this.
First, it’s important to remember that USDA RD home loans go through a two step approval process. First, the USDA approved lender does all the underwriting on the 502 Guarantee loan – this includes documentation, appraisal, inspections, etc. Once the lender/bank is finished they approve the file and then send to USDA for the final approval or “final commitment” as it’s know. Once the USDA office has the file, they generally take about one week to issue the final commitment and send back to the lender for closing. This time can greatly change based on the state, volume, etc. But the Florida USDA office has been taking about 1 week for as of 2016. Ok, let’s break it down below:
Step 1 – Homebuyer goes under contract to purchase a home, the loan process begins. The lender will begin all the paperwork with the homebuyer at this point – order appraisal, coordinate title work, insurance, among other things. Generally this entire process will take a few weeks on average to complete.
Step 2 – Lender underwriting and approval is complete – loan file is sent to USDA Rural Development office for final commitment. Again, the time USDA takes can vary greatly based on location and volume. But in Florida / Georgia applicants should expect this part of the process to take around 1 week. Your lender should know the current USDA turn times in your area once your loan file is sent. USDA home buyers in other states can learn more about National USDA Mortgage here.
Step 3 – USDA issues final commitment, and loan is clear to close. Basically at this point the lender and title agent will work to draw up the final closing documents. This generally takes a few days, after this the buyer will close on their new home!
The entire USDA mortgage closing time will take about 40 days on average from contract to closing. Some less populated states are faster. Sometime things come up in the process that can add small delays to the process. Buyers need to remember there are MANY moving parts to a real estate transaction. You have realtors, mortgage company, title agent, appraiser, home inspector, home insurance agent, surveyor… this list goes on. However, a good realtor and mortgage lender can manage the process to insure everything runs smoothly.
If you are a new homebuyer and have questions about the USDA loan pre-approval process in FL or GA, please contact us at 800-743-7556 or just submit the quick info request right here. Located outside of Fla & GA? Learn more about USDA in other states here.
Buyers that have questions about an existing USDA loan currently in process will need to contact their lender, bank or mortgage broker direct for status and closing updates.
Also be sure to read the latest USDA frequently asked questions here. USDA Mortgage Source is Florida’s leading 100% USDA loan resource serving you 7 days week.
USDA Loan Final Approval – Closing Time