Changes to USDA & VA Loans: Avoid these Potential Pitfalls

Do you struggle to keep up to date with the latest lending regulations? In today’s mortgage marketplace, you’ve got plenty of company.

Besides offering Maryland title insurance and closing services, Lakeside Title Company is also committed to providing realtors, lenders and builders the latest industry news.

Changes to be Aware of

A few items and changes that will affect you and your business at some point:

  1. USDA loans now limit acreage to no more than 5 acres. This is important to know for Real Estate Agents who are listing properties and/or contracting offers for a specific property.
  2. The VA allows domestic partners to co-sign on a loan, but limits the VA max loan to half of the area loan limits in such cases.
  3. Buyers with conventional loans may now move out of their primary residence with less than 30% equity in order to offset their mortgage with rental income. VA loans have never had this rule, but FHA continues to enforce it.
  4. Failure to have the buyer’s earnest money deposit checks cashed early in the process could result in a delayed closing. Consider cashing the deposit early or if acceptable with your lender have Lakeside Title Company hold the check to avoid this process.
  5. You must get your invoices (Well, Septic, Termite, Home Inspection, etc.) to Lakeside Title Company at least ten (10) business days prior to closing, otherwise these fees could upset the CFPB cost analysis and result in a re-disclosure and four (4) day delay to your closing.
  6. Should a loan not require any of the following (Termite, Well, Septic, Home Inspection) and you add these costs to the HUD1 to be paid by the seller, you will now be required to present these reports to the lender for their review. If the results of these reports fail to meet the lender’s requirements, the loan could be denied.

Lakeside Title Company: a Leader in Title Insurance

Lakeside Title Company is a Maryland title insurance company that serves builders, lenders, and realtors in Maryland, Washington D.C., Northern Virginia, and Southern Pennsylvania. We close over 4,000 transactions a year from 14 different locations. For more information on title insurance, title searches, and closing services, please visit our homepage.

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