How To Get A USDA Loan In Arizona Closed FAST!
s It Really Possible To Close A USDA Loan In Just A Matter Of Days?
Our USDA Loans close fast, really fast. But not everybody closes the USDA Loan so quickly.
Around the real estate and mortgage communities, there is a widespread belief that the USDA Loan has to take longer than any other type of loan. In fact I have heard rumors that the USDA Loan can take 3 to 4 weeks longer than an FHA Loan to close.
WHAT? Three to four weeks longer. Are you kidding?
The reality is that a USDA Loan can close just as fast, if not faster, than an FHA Loan. We close our USDA Loans fast, really fast when compared to the other lenders I know in our area. Let’s take a moment and look at what impacts how quickly a USDA Loan can close.
The quickness of the loan process is a combination of several factors:
The preparedness of the borrower
The cooperation of the seller
The ability of the lender to process quickly
The turn time at the local Rural Development office
Apply for a USDA Loan Online Now: Loan Application
Let’s look at them one item at a time:
The Prepared Borrower
This is the only area that YOU can help speed up the process of getting your USDA Loan funded. Basically the Prepared Borrower will have gathered all the following and have them ready to provide to the USDA Loan Originator at the time of application. Providing all the documentation at the beginning will save time during the process and remove processing questions that typically can cause delays.
The items the Prepared Borrower will have available are:
Legible copy of a photo ID (driver license)
Copy of the social security card
30 continuous days of pay-stubs from work (or any additional applicable proof of income)
2 months of ALL asset statements (be sure to include the blank pages also)
2 years of Federal Income Tax returns with ALL schedules
2 years of W2s
Signed letter of explanation for any derogatory items showing on the credit report
Having this information gathered and available for your USDA Loan Originator will assure that you are doing your part in speeding up the process.
After you get your application in you will get a disclosure package from your loan originator. You’ll also want to get the full disclosure set back to your loan originator as soon as possible.
The Cooperative Seller
In the current market, many of the sellers out there are banks. You might find a great house that is actually owned by Fannie Mae. Working with a bank as a seller is not generally a bad thing. I have had many loans close that where the seller was the bank and they have moved by quickly.
But the biggest obstacle with working with a bank as a seller is that many times they just simply require time, and lots of it in order to get the closing documents to the right party to review and sign. Many times they have 3 or 4 different departments that would need to review and approve the documents.
So, you really need to be working with a lender who can get closing documents to escrow at least a week early.
The Quick Moving Lender
Every lender processes and underwrites loans at a different capacity and there are three turn times that you need to be aware of.
The first turn time is the processing turn time. That is how long does it take to process a file and get it ready for the underwriter once you have provided all of your documentation. A good processing system should have a file ready in about 5 days, however there are outside forces which may impact this turn time. Things such as how long it takes to get the appraisal and the title report can cause a lengthy delay.
The second turn time is the time it takes to underwrite a file for approval. After processing, most mortgage companies ship their files out to a lender to be underwritten. Some mortgage companies, like ours, have underwriters in the office and can underwrite a file for approval very quickly, sometimes even the same day.
Underwriting turn times can be anywhere from hours to 30 days. Be sure to know how long your underwriter will take, mine is usually done within a day or two if there is a heavy workload.
Choosing the right USDA Lender will assure that you are doing everything you can to close your loan on time, or even early.
The Local Rural Development Office
Once your loan is approved, portions of it will be sent to the local Rural Development Office for review and issuance of the Conditional Commitment letter for the USDA Guarantee. In Arizona, most of the RD Offices will get this portion done in just 2-3 days. In some parts of the country it can be much longer.
Once RD has issued the Commitment, then you are ready to sign docs and close your USDA Loan.
While a streamline USDA Loan processing system like ours can help to get a USDA Loan approved and closed in as little as 15 days, most other lenders are taking 45-60 days.