USAA does not work well with Pulte Home Builders Contracts

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I have been a USAA member for over 15 years and most recently pre approved for a VA Mortgage through them. I finally found a home in a sub division community in Massachusetts, building a new hom through Pulte Home Builders. I very much wanted to stick with USAA fo the mortgage for this new home, however, Pulte requires an immediate appoval of a VA Mortgage even before getting to close process. They give a conditional approval but require all paperwork be turned in (pay stubs, tax returns etc) immediately. When I called USAA to try and get this process started to show Pulte an approval, USAA told me that is impossible and mortgage process would not start until 45-60 days prior to completion of the home. This USAA process does not work in accordance with the Pulte contract agreement which requires a Pre-Approval/Pre Approval which is different than the Pre Approval Mortgage letter. My question, why does USAA not work with large National Home builders like Pulte, knowing they have this policy in place? I am now forced to go through Pulte Mortgage which is fine, but not as easy as it would have been going through USAA since all my banking, home owners insurance, car etc are through them.

8 REPLIES

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Hi bostonrecruiter,

I have asked a mortgage specialist for more details to answer your question. I will get back with you when I have a proper answer! Thank you!

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Unfotuntately that thread does me no good. Pulte Homes requires an actual approval for your mortgage BEFORE you even get to the closing stage. What this means is that all conditions required from a mortgage have to be met at this stage so when it comes to close time, there are no surprises etc. The problem is USAA requires a house be 95% completed if you are building to even start the closing stage even for a VA loan. This prevents a buyer building a house through a National Builder like Pulte from using USAA and thus almost making us go through their own lender, Pulte Mortgage. In some ways it is good to go through Pulte Mortgage because they understand new construction and are updated on the buidling process of your new home. However, I have been with USAA 15+ years and wanted to stick with them through the Mortgage process and in the end, I am not sure they do new contruction mortgages. It is unfortunate because if USAA could start the process earlier and work hand in hand with VA Approved Pulte Homes, they would gain lots more business since Pulte is literally building everywhere around the country.

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From what I read, these are risky propositions if the builder doesn't complete the home.   Probably better that USAA doesn't risk those type of loans.

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I fail to see a National Home Builder as big as Pulte a risk of not completing a home. That is what signed contracts upfront are for. This could happen with any home builder and it would make sense to me that USAA offer this type of mortgage set up for new home building. What I see is lots of lost mortgage opportunities since they do not perform a mortgage approval upfront prior to close. It would be a simple process actual. You just start the mortgage condition process earlier and work hand in hand with the builders to ensure a smooth closing. Not sure what is so hard about this. Plus with Pulte, they are so strict with sticking to schedules, they have a 96 day window to complete the entire home. This is not rocket science and I feel that USAA is losing business because of this. 

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Apparently the extra cost and risk just isn't worth the profit potential, otherwise I expect they would do them.  

 

http://www.bankrate.com/finance/real-estate/how-do-home-construction-loans-work.aspx

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Dear bostonrecruiter,

Here is a more in depth answer from a mortgage specialist:

 

We work with large national builders on a regular basis. In this instance, I think we could have communicated more clearly and asked more questions. While we cannot issue loan approval without a title policy, acceptable appraisal and proof of insurance, we can issue credit approval based on documenting your income, assets, and credit profile. Beginning this early in the process will most likely require you to resubmit updated income and asset statements closer to the closing. A representative will be reaching out to you to discuss in greater detail.

 

I hope this helps!

Thank you for posting.

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No sorry it did not. Your rep contacted me and admits there is nothing USAA could do at an early stage to start a mortgage process unless the home is 90% completed thus really leaving me in the dark too close to closing window. The point of this whole matter is, you do not work hand in hand with large national home builders.