Great news, 2021 USDA closing turn-times are currently running 1-7 business days for most states. This is a big improvement over the past where USDA Rural Housing times could take 2 weeks + in more populated states. Just a little background – the USDA closing turn times is the time it takes the USDA / Rural Housing office to review the applicant’s loan for a final loan commitment. Below we will break down the entire USDA loan closing process and estimated timelines:
- Buyer’s initial loan consultation and pre-approval – During this step, the buyer talks to the mortgage company about their goals and completes the USDA loan application for their initial loan pre-approval. This step is generally completed in about 30 minutes or so to complete. Once the buyer has their letter of pre-approval, they can begin searching for the perfect home.
- The buyer finds the perfect home and goes under contract to purchase the home – Once this happens the loan process technically begins. The buyer will provide any outstanding underwriting paperwork to the lender, sign their loan disclosures, etc. This can all be done electronically or face to face. Once this step is complete, the lender will order the home appraisal. The entire appraisal, home inspection, and underwriting takes the mortgage company about 2-3 weeks to complete.
- Once the file has been cleared by the mortgage company, the loan is sent to the local USDA Rural Development office for the final loan commitment. USDA Rural Housing is the only loan program that requires this final step. During this step, USDA basically checks the lenders work and ensure everything meets their requirements. As mentioned above, this step takes about 1-7 business days to complete. Please note, the USDA turn times can/do change based on loan volume. *If you have questions about the status or “turn times” of a USDA loan already in process, you will need to contact your lender directly for updates.
- Once the loan file is completely approved and signed off by USDA, the file is sent back to the lender with the final loan commitment. The home buyers will generally close about 3 days later depending on the property state. The entire process from purchase contract to closing takes around 4-5 weeks to complete. These times can fluctuate depending on the mortgage company processing the loan, home buyer, and state.
Please note: USDA refinance process is generally a little quicker as most of these loans do not require the appraisal.
USDA Mortgage Source is a leading USDA loan resource. If you have questions or want to learn more, please submit the short Info Request Form on this page for quick service. You can also call us 7 days a week at Ph: 800-743-7556