What happens to the earnest money paid when financed with usda ?

It goes to make your loan amount smaller and or pay for a portion of your closing cost.

Sometimes all or a portion of the funds can be refunded at closing. Typically a borrower will have $1000-1200 or more in money out of pocket to buy a home before closing - even with USDA or VA financing which is 100%. $500 earnest money + home inspecton + money for the appraisal most lenders will collect up-front.

- and that normally happens when closing costs are paid by the seller or with help from the lender.

The underwriter would prefer to see it paying your loan down in hopes you will continue to pay your loan down. If it's a hardship that you won't get the money back I would really think hard if your ready to buy a home right now. Owning a home means lots of $500-$1,000 expenses that you don't get back immediately. USDA is a great program but every home buyer should at minimum have a $2,000- emergency savings account in the bank.

Limited needed repairs are possible to include with a USDA loan but it is unusual to do so and a more difficult approval. More normal is a FHA or conventional renovation loan - I handle all if needed

- Sure thing! FYI, it is now possible to get a conventional loan with as little as 3% downpayment and include some needed repairs - but there is a lot more flexibility on the scope of repairs with 5% down on a conventional or a FHA 203k renovation loan.

It can be applied towards closing costs and if they are a;ready included they should be refunded to you.

THE earnest money if applied to the loan balance for the purchase .. ITS a good faith deposit to show that you are serious in purchasing the property.. THE escrow officer will factor the deposit into funds needed to bring to closing . linda

The money will go towards making your loan amount smaller and or pay for a portion of your closing cost.

It possible the earnest money can be refunded to you if all the costs are being paid and your within the allowable loan to value for USDA.. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com