USDA Mortgage Processing and Closing Times

Mortgage and Lending with USDA / FHA Mortgage Source

USDA loan closing time

We often receive questions about the USDA Rural Housing mortgage turn times in 2016 -   how long it take to close a USDA loan?  how long it takes to get a USDA loan pre approval?  how long it takes to hear back from USDA, etc.  Below we are going to break down the process so new home buyers know what to expect when using the USDA RD program in Florida. Home buyers in other states  - please click here to learn about National USDA mortgages


The first thing buyers want to keep in mind is the USDA loan process is a two-step process. The USDA (Rural Housing) doesn't actually underwrite the 502 Guaranteed program direct, this is done strictly by approved USDA lenders and banks.  The 502 Guaranteed program is the USDA home purchase program most moderate income buyers will use, and it also accounts for the majority of USDA loans.


The first step in the home buying process is the USDA mortgage pre approval. This is generally completed over the phone, online or face or face and takes about 30 minutes to complete. The USDA loan specialist will ask some basic questions in regards to living history, employment history , income, assets, etc.  Once complete they will process a credit report to insure the applicant meets the USDA guidelines for loan approval.  The applicant can get a letter of pre approval, and start shopping for their new home all in the same day.


Basically once the initial USDA loan pre approval above is complete, everything is stalled until the buyer enters a fully ratified contract to purchase a home.  Once the borrower is under contract, the USDA processing and underwriting begins. This is the part where you want to pay close attention.


First, the USDA loan processing and underwriting begin with the lender. This is time when the underwriter (lender) reviews all documentation and issues loan conditions.  Also during this time the inspections ( appraisal, home inspection, WDO) will be done. Once all the loan conditions are met AND cleared, the loan will be sent to the actual USDA office for issuing of the final loan commitment. It generally takes the lender 2-3 weeks to complete this first step and send the file to USDA.


Second, the loan file is sent to the USDA Rural Housing office for finial loan commitment. USDA takes about 2 weeks to issue finial loan commitments. Basically during this time they check the lenders work and insure the loan was properly underwritten according to the guidelines.  Once complete they notify the lender and the loan is clear to close.


Third, a few days later everyone meets at the attorney / title office for the closing. Buyers can expect the entire process from contract to closing to take about 40 days on average.


It's important to remember the actual turn times listed below can fluctuate depending on the factors below:

  • The Lender - Insure you are working with a lender that specialize in the USDA Rural Housing program. Most don't as this program is still not as popular as FHA or Conventional loans.  It's highly recommended to use a lender or bank local to your state - if you are purchasing a home in Florida, use a Florida lender. There are many reasons for this.
  • USDA -  Sometimes USDA Rural Development gets really busy and backed up with files. Your lender should be able to provide an approximate time line based on the current USDA turn times posted each day. But in short, they do change.
  • You the borrower -  Yes, you have a lot to do with loan process and how fast it moves along.  Be sure you work closely with your lender and provide any documentation asked for ASAP. This will always help speed the process along. 

Questions about starting the USDA loan process? Contact USDA Mortgage Source 7 days a week at ph: 904-302-6060 and visit our web site here


Buyers that have questions about an existing loan already in process with another lender, will need to contact their lender direct for status. 


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