Step 1: Schedule a Consultation and Verify Eligibility

• Initial Consultation: Begin by scheduling a consultation with us to discuss your eligibility for a USDA loan. You can learn more about that process on our Purchase Services page.

• Property Eligibility: Verify property eligibility using the USDA Rural Zone Look-Up

• Income Eligibility: Check your eligibility by reviewing the USDA Income Limits

Step 2: Contractor Selection and Project Planning

• Initial Consultation with Contractor Before diving into the loan process, it's crucial to line up a qualified contractor who is experienced, has all the necessary credentials, and is financially stable to complete your renovation projects timely. You'll need to have your contractor ready and a detailed project plan in place. This plan should include a comprehensive list of renovations, a timeline, and a budget.

• Project Approval: Before selecting a contractor, we advise contacting us to comprehend the prerequisites. Once your contractor and project plan are set, forward these particulars to our team. We'll verify that your project's scope is in line with the loan programs' criteria you're eligible for. For inquiries regarding this stage, please schedule a consultation. Book Appointment

Step 3: Pre Approval or Application

• Formal Pre-Approval or Application: Submit a formal Loan Application if you already have a contract on a house to purchase, or a Pre-Approval Request if you’re still looking. We will guide you through the process and inform you of any additional scenario-specific requirements.

• Maximum Mortgage Worksheet: This worksheet will help us calculate the maximum mortgage allowed, and therefore how much is available for your renovation project.

• Documentation Required:

• Income Verification: Recent pay stubs, W-2 forms, and for certain types of income we’ll also collect tax returns for the past 1 or 2 years.

• Other Income Documents: Documentation to support other sources of income such as retirement statements, Social Security Awards letters, or any other documents proving receipt of income.

• Asset Documentation: Bank statements or other assets to demonstrate you have the funds for the down payment, reserves, and closing costs.

• Credit Report: We will pull your credit report, but it’s also good to review your credit in advance.

• Property Information: Details about the property you intend to purchase, including a sales contract if you're already under contract.

• Photo ID: We must identify you.

• Contractor Agreement: A signed contract with your chosen contractor detailing the work scope, timeline, and cost.

• Project Plan: Detailed plans and specifications for the renovation work to be done.

Step 4: Loan Processing and Underwriting

• Loan Set Up: After you successfully execute a purchase contract on a home, we’ll begin the loan setup phase. This is where we structure your loan, shop lenders for you, and review all of your documentation one more time to make sure you’re set up for success. We’ll focus heavily on loan requirements, terms, costs, payments, and final numbers at closing, so you get a clear picture of what lies ahead. After discussing all the details thoroughly, we will complete the loan application and prepare it for submission.

• Automated Underwriting: One of the first steps in the loan approval process is submitting your application to an Automated Underwriting System (AUS) that evaluates your risk profile based on predefined criteria. The AUS will generate a decision and a list of requirements. The results serve as the roadmap to reach final approval.

• Loan Disclosures: Your official loan application and associated disclosures will be generated and sent for you for electronic signature. We’ll guide you through signing these and once completed we’ll get your file ready for underwriting.

• Underwriting: We will submit your application and documentation to underwriting for approval. The underwriter reviews your financial information, ensures that we meet all guideline requirements, and verifies the results of the automated underwriting system (AUS). This process may take several days or weeks, depending on the complexity of your situation. During this time, we may need to go back and forth with you and the underwriter to clear any conditions or questions that arise. We will communicate with you regularly and keep you updated on the status of your approval.

• Renovation Conditions: To ensure a smooth renovation process, all renovation conditions, along with other underwriting conditions, will be gathered. This includes a contractor profile, contractor insurance, contractor agreement, a final plan, and detailed cost estimates, so we can provide this information for the appraiser to determine an "as completed" value.

• Appraisal: An appraisal to assess the property's value and compliance with the loan program's guidelines and standards will be scheduled. This step can occur either before receiving conditional approval or, in many cases, after conditional approval has been issued by the underwriter.

• Title Work: We will order title insurance, obtain a 12-24 month chain of title, receive wiring instructions, a closing protection letter, and acquire a tax certification to confirm the accuracy of property taxes. All these steps are taken to ensure that the title is transferred to you free of encumbrances, and that neither you nor the lender is at risk. Essentially, we are verifying that the title company has executed their duties correctly.

Step 5: Loan Approval and Closing

• Loan Approval: Once all of your underwriting conditions are cleared you’ll receive full loan approval. That means you’re almost out of the woods.

• Clear to Close: After loan approval we’ll work to do just a few more things in order to get the final ok from the underwriter that we are completely in the clear to draw documents. These are the magic words, clear to close, that we always want to hear in the mortgage industry. This means the only step left is to draw up the final paperwork for you to sign.

• Closing: At closing, you'll sign all necessary paperwork, finalize the loan, and take ownership of your new home.

• Renovations Begin: Renovation work must begin with 30 days of closing.