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How Long Does the USDA Take to Approve a Loan? Not for long.

Quick Summary

  • It usually takes 30-60 days for your USDA loan to get authorized.
  • Working with a USDA-approved lender is an important step toward getting your loan processed quickly and smoothly.
  • The Guaranteed Underwriting System (GUS) assists lenders in making an informed judgment about whether to approve your USDA loan.

The length of time it takes for a USDA loan to be approved varies by state and how your file is prepared and processed. When loans are not authorized after a few days, most people become concerned and decide that they did something incorrectly or overlooked a few requirements during their application.

This isn’t always the case, so we’ve decided to explain the factors that contribute to a quick USDA loan approval as well as what you should never do when applying for this type of loan.

This article is not only for those who have already submitted their application and are awaiting responses, but also for those who have just begun the process and want to ensure they are following all of the steps correctly.

Can You Get a USDA Loan Pre-Approved?

Yes, you can get pre-approved for a USDA loan.

This must be completed before proceeding with the application process. The first step in obtaining a USDA loan should always be pre-qualification and pre-approval.

Pre-qualification is essential to identify possible issues you may run into during the actual application process, it helps buyers understand how much they can afford in terms of acquiring a loan i.e your purchasing power.

If you pass the pre-qualification and approval stages, you will receive a credit approval letter, which realtors and homeowners usually require before allowing you to write a contract for a home you want to buy. This letter is only valid for 45-90 days, so you must begin your application within that time frame.

How to Get a USDA Home Loan Pre-Approval

Getting pre-approved shouldn’t take more than an hour; it simply requires reviewing documentation and data. Lenders often only verify the information you submitted during the pre-qualification stage. Take the following actions to ensure you are pre-approved:

  1. Find verified USDA lenders: The most crucial step is to identify lenders who have been taught and understand the USDA loan regulations. You can compare them based on credit score rates and state availability, but once you’ve decided, be prepared to supply the essential information.
  2. Submit your information: Your lender will want to verify your documents and ask questions based on USDA’s strict eligibility requirements.

Expect questions about your credit score, household income limits, debt-to-income ratio (DTI), employment history, and loan-to-value ratio. All of these terms have predetermined values that must not be exceeded in order for you to qualify for a USDA loan.

  1. Wait for feedback: You’ll need to give your lender time to thoroughly evaluate your paperwork after you’ve submitted all of your information and answered all of the appropriate questions.
  2. Receive your pre-application decision: After the lender has verified all of your information, you will receive a letter with the final decision. If you qualify, the letter will show that you have passed this stage and can continue your application by looking for homes.

However, if your application is rejected you’ll need to re-apply (maybe even consider an FHA loan), this can be done with the same lender or with a lender with different conditions. Your lender will tell you why you weren’t authorized for the loan, and you can reapply once you’ve fixed any outstanding difficulties.

How Long Does a USDA Loan Take to Close?

After you’ve received your pre-approval letter, found the home you want to buy, signed the relevant forms, and been approved by your preferred mortgage provider, your loan request is forwarded to the local USDA Rural Development office for the final loan commitment. These stages can take up to two weeks.

When the USDA approves the loan file, it is sent to your lenders with the final loan commitment, and the closing normally occurs three days later. As a result, the time it takes to close a USDA loan after signing a purchase contract is about 4-5 weeks.

Is It Possible to Check the Status of Your USDA Loan?

If you’ve applied for a USDA loan and haven’t heard back from your lender, you can always check the status of your loan online. You can visit USDA’s website to access your loan information. Their customer service will provide you with any information you need to know concerning your loan status.

Guidelines for USDA Home Loan Underwriting

The USDA designed the guaranteed underwriting system (GUS) to act as an automated underwriting system for lenders to submit and process loan application requests online.

It enables lenders to make informed decisions regarding your loan application while also eliminating human mistake. This is how it works:

  1. Credential upload: The lender enters all relevant credentials, as well as any other information, into the GUS system. To avoid a USDA loan decline, the information entered into the system must be correct.
  2. Determine borrower’s credit score: Once all of the information has been uploaded, the system compares the borrower’s credit score to its eligibility standards to determine the borrower’s creditworthiness.
  3. Scorecard rating: GUS will offer a scorecard grade from the system to evaluate whether the lender should “accept,” “refer,” or “refer with caution.”
  4. Final underwriting decision: Other criteria are considered, and The GUS system then provides the final underwriting decision for the lender to deal with.

Important Points to Remember

One major factor people get wrong during their loan approval is choosing non-USDA-approved lenders.

USDA-approved lenders can work with realtors, home buyers, and the USDA field office directly. This means no third party is involved in the submission of your documents and less waiting time. They will handle all of the following steps:

  • Pre-qualification
  • Loan application
  • Onsite underwriting
  • Loan approval
  • Submitting the file to USDA
  • Ordering closing documents and
  • Loan funding

All of this control enables them to save time and keep both parties on the same page. Third-party lenders do not have this capability and must usually wait for feedback from the USDA-approved lenders to whom your file is sent. This can cause a delay and is sometimes the reason for significant wait times for USDA loan approval. With USDA construction loans, it’s sometimes even longer.


How Long Does a USDA Direct Loan Take?

The 502 Direct Loan is completed in 30-60 days. This includes pre-approval, mortgage approval, and closing. All of these actions should be timed according to your lender.

How long does USDA Loan underwriting take?

Under typical circumstances, the first USDA loan file submission should result in an initial underwriting approval within 72 hours. However, if a stumbling block occurs along the way, this process could take up to a month.

How Long Does the USDA Take to Review a Loan?

The USDA closing turn time is the amount of time it takes the USDA to review a loan. This typically takes 1-7 business days to complete. When this stage is completed, the borrowers will be able to close on their home.

How Does This Apply When it Comes to Refinancing?

The time is takes to refinance with USDA is quicker since there is already an existing USDA loan.