I am new to this USDA Direct and have learned a lot from reading various posts on this forum. I sent a pre-qualification questionnaire back to the USDA and was pre-qualified for a USDA Direct loan (about 3 hours after submitting the questionnaire!). I am in the process of gathering all the papers needed for the actual application but the USDA lady says everything looks good so far. On the estimate paper she emailed to me it lists the loan amount and appraised amount of $ 220,800. And I believe it shows my reduced interest rate as 1.009%. I am looking into buying a condo that is currently being built. The phase I would buy into will start being built in June and should be finished by the end of the year.
What I am asking is, am I even able to use the USDA Direct loan for this condo unit since the price is $ 225,000? I would then having closing costs added to it also. Am I able to pay the difference from $ 220,800 from a gift from a family member. What had me questioning this is on the paper it lists $ 220,800 as the appraised value. These condo units will probably appraise higher than that. What happens then? Am I denied the loan?
I live in California where house prices are extremely high and this USDA direct loan is my only option as being a homeowner.