USDA Loans are perfect for people who want a home in a little more rural area. USDA Loans have no down payment requirement, and Sellers can pay closing costs… meaning you can buy a home with a USDA Loan with PENNIES out-of-pocket! The payments and Mortgage Rates for USDA Loans are some of the lowest available. Because there’s no down payment, the Government does require a slightly higher credit score than some other mortgage programs. However, minimum Credit Score requirements for USDA Loans 2023 can no longer go below 640 for automatic approval. You can go below that for a Manually Underwritten loan.
The program’s full name is the USDA Rural Development Guaranteed Housing Loan program. Most people call them “USDA loans” or “USDA RD Loans”. USDA home loans NC are insured by the U.S. Department of Agriculture. Again, the USDA’s loan’s biggest feature is that it is a No Money Down Home Loan!
Is the USDA loan program limited to First Time Home Buyers?
No, the USDA RD Loan can be used by First Time Home Buyers and repeat buyers. But to be eligible for a USDA loan, you cannot currently own another house.
Minimum Credit Score Requirements for USDA Loans 2023
- For an “Automated” (Automatic) Approval on a USDA Home Loan in NC, a minimum credit score of 640 is needed. We will also need a 640 credit score if you are applying for the NCHFA Mortgage Credit Certificate / the 2023 Mortgage Tax Credit. IF YOU ARE OVER THE 29/41 Ratio requirements for a USDA Home Loan, you might need a credit score as high as 680 for an “Automatic Approval.” Without the Automatic (read: An approval spit out by the Computer system they have) then you will get a MANUAL Underwrite for your USDA Home Loan.
- We CAN do a Manual Underwriting of your USDA Loan if the Middle score of all applicants is at least 600. We need some strong Compensating Factors to ask for an approval on loans with middle credit scores between 609 and 640. A college degree, or Job training that provides some potential for increased earnings MIGHT be considered a compensating factor. There’s a pretty long list of USDA Loan compensating factors that we use to help borrowers with lower credit scores, having cash left over after closing (for instance) is a pretty good way to “beef up” your file and get approved. Another factor we are seeing important for USDA Loan Manual Underwriting Approval is little to NO Payment Shock.
- With a Manually Underwritten USDA Loan, the minimum credit score requirements are tied to over-all debt ratios. Like Compensating Factors, we can ask for a Debt Waiver from the USDA Loan Underwriters, and we will go over all of your options if your scores are lower than USDA is looking for, or your ratios are higher. We WILL work with folks who do not CURRENTLY meet the minimum credit scores requirements for a USDA Loan 2023, to help you get them higher so you can buy. We can run “simulators” that tell us exactly what you need to do to get your scores higher. We are not a Credit “fixing” fill in the blank company. We are not charging you for our time, or expertise – we just hope you WILL use us when you’ve gotten your credit fixed and you’re ready to buy a house 🙂 We are genuinely here to help!
- No more than one payment in the last 12 months can show as having been more than 30 days late. In general though, minimum Credit Score requirements for USDA Loans 2022 mean that you need 12 months of “Clean Credit” with no bad information added to your credit file. “Clean Credit” is a slang term used OFTEN in mortgage lending. It refers most often to someone who has 12 months with no late payments. But it’s not just late payments, it also refers to 12 months with no new collections filed against you. 12 months with no judgments of liens filed on your credit report. 12 months with no one writing anything to your credit report except GOOD STUFF. If you had some late payments on a couple of credit cards in the middle of 2018… and then you hit another rough patch in 2019, and then AGAIN in 2020 and 2021… we refer to that as “sloppy” credit. You could still have a credit score of 620 – but it shows a history of not paying on time. For THIS type of borrower – the underwriter might require us to have 18 to 24 months of CLEAN CREDIT!
- Chapter 7 and 13 must be DISCHARGED for 3 years – Foreclosures must have been completed 3 years ago. This is significantly more strict than FHA or VA loans, and while the Underwriting Manual says you can get an exception – we’ve had no luck getting one of their Underwriters to approve a loan with less than 3 full years.
- Collections – Accounts cannot have been placed in collection status within the last 12-months. So again, they want to see 12 months of good stuff being added to your credit report. Collections May not need to be paid off. This is especially true for Medical Collections. If the Collection accounts total (medical or not) less than $2000 then USDA No longer requires us to pay them off.
- Judgements – Must should be paid off for at least 12 months. Because Judgements can attach to the property you purchase and become a first lien, this can be kind of a big deal… This requirement is non-negotiable, because you can not get Title Insurance if you have a Judgement or Lien against you. Remember, you can not dispute a Judgement or Lien. A Judge had to see the documentation for that to be on your report, so you have the option of Settling it – or leaving it on the report until it ages off. Unpaid Taxes (a tax lien) will stay on your credit report for 15 years.
- If the applicant’s middle credit score is under 640 a written verification of rent is required for the most recent 12 months. IF you’ve been living with your folks for the last 6 months, or you always pay your roommate – this could make it tricky. Call us early in the thought process of buying a home if you have not been on a lease recently.
- USDA Loan Underwriters no longer accept non-traditional credit. Traditional Credit Scores are needed. We need at least two trade lines. We can no longer build credit, using your cell phone bill as proof that you make your payments on time. If you are a first time home buyer, and you don’t have much credit – or if most of the credit you do have is Student Loans, well then call us. You can sometimes get added to a family member’s credit card, or you can get started with a couple of secured credit cards. The problem is that USDA Home Loan Underwriters require us to back out the credit you’ve gotten as an Authorized User.
- You need at least TWO trade lines that are at least 12 months old. Some loan officers reported that they need 2 years of credit history. We don’t. NC USDA Loan Underwriters will approve loans with a 12 month history of on time charges, payments on at least 2 accounts.
USDA Home Loan Requirements
To qualify for a USDA Loan in NC, you must buy a house within the USDA Loan “Footprint.” Every County in North Carolina has some portion that qualifies for the program. The “footprint” for USDA Home Loans in NC is shrinking. This is happening in waves, and the next change will likely take place in October. As our population changes, suburban areas, like Wake Forest and Holly Springs are losing neighborhoods from USDA Home Loan Qualification.
These mortgage loans are for owner occupied properties, and they are really not designed for a Horse Farm. In fact Outbuildings can detract from the value USDA places on the home.
- Non-occupant co-borrowers are not permitted
You must also be under the Household Income Limit for the County you are buying a home in. The USDA Loan Underwriter looks at Income from two different perspectives:
- Eligibility Income – Includes all income (salary, tips, bonus, overtime, alimony, child support, etc..) received by the applicant and co-applicant(s). This income is used to calculate qualifying ratios.
- Adjusted Income – This is the applicant’s eligibility income less the total of any of the following deductions applicable to the loan. Income from all household members must be included in the total adjusted income. This adjusted income must not exceed 115% of the median household income for the area.
If you are considering a USDA Home Loan, and you have more questions about the Minimum Credit Score Requirements for USDA Loans 2023 –> please call Steve and Eleanor Thorne , 919-649-5058 Connect with us on Google Plus or Facebook!
There is obviously a lot more to figure out about this issue, but you made some really good points. I will definitely be checking here more often. Thank you.
My credit score last year got lower because i have some unpaid bills on my credit card company and i also lost my job.;;;
in this times of economic recession, sometimes it is difficult to have a great credit score-*.
We still have USDA Home Loan available in NC – if you’ve been told there are no funds – you were miss lead. The “PMI” changes on 10/1 – but we are still closing these loans.
A few things… My husband’s Chapter 7 discharged in Jan. 2011, we’ve re-established credit & scores are: his-647-mine-658, we pay all utilities & rent on time. He’s been in same line of work for 20+ yrs. We have 401K savings & some cash reserves, too. We’re interested in qualifying for a USDA loan outside the Charlotte area & wanted to know what would be the earliest possible time to try & qualify? Additionally, his former FL primary residence (a conventional loan) was included in the BK & then months later, short sold in a lender approved sale in 10/2012 with no neg. info as it was included in the BK there’s nothing reporting but zero balance, incld. in BK Our rent is $1170 and we’d be seeking a PITI paym’t of about $700-800. BTW -We’re Charlotte transplants. Thx for your time & help.
Please call us, we’ll be glad to help you. In general, it looks like you might be okay, but we would need to pull a MARI report, which we can do in a day.
Hello, I have a question on the USDA purchase money loan (NC). My mid score is 684 and everything else is in line for an approval. The one thing in question is a $12,000 charge off account (2008) with Home Depot. There is a collection agency that has the account now and placed it on the report as a collection. There was a hardship regarding the account going to collection in the first place, but if it’s an account that won’t effect lien position on title, will we even need to address that with a 680+ score?
Thanks for asking the question! We would not necessarily have to count the 2008 against you, because it is more than 5 years old. In NC, that’s the statute of limitations for collections… having said that, it’s going to depend on the way the information is being reported. We would be glad to look at it for you – just call us 919 649 5058
I’m looking to buy a house in South Carolina but I won’t be able to occupy the house for about a year at least. Can I still qualify for a usda loan?
I am a veteran retired. My credit score is 566. My income per mth is $7810.00 can i qualify for a USDA loan?
You will more easily qualify for a Veteran Home Loan – even if you’ve used your VA benefit before, you can use it again!
USDA Home Loans are for Owner Occupied homes only – but every situation is unique. We do loans in South Carolina, so call us, and we’ll be glad to go over it with you. There’s no fee or obligation 919 649 5058
My credit score is 639 .I am on s.s.disability making 12,720 yearly .Can I get a fha or usda loan ? How much home would I qualify for? Thanks
I had a bankruptcy that was discharged in 2010 and since then I have reestablished credit and looking to do a USDA loan, I had quicken run my credit and they said my score was like 704 and have never missed a payment or had a collection since the bankruptcy and have multiple trade lines (credit cards with zero balances) had 2 car loans and just paid one off in full and never late on anything since the bankruptcy. They told me I qualified for FHA but was wondering about USDA, but was curious if loan amounts were different and if you get approved for higher amounts with USDA. I think they said I qualified for like 180K with FHA but was curious if that amount would be higher with USDA since the PMI and other stuff is usually lower. Would I even qualify for the USDA because I know they are income stipulations. Thanks
Matt – Quicken doesn’t offer USDA Home Loans, best we can tell, based upon the fact that we’ve done several loans for their employees. With the profile you’ve given you would definitely qualify for a USDA Home Loan. Call us at 919 649 5058
Yes you can likely get a small USDA Home Loan. In general, folks qualify for about 40% of what they make. You might need a co-signor, which is available with FHA loans, to make this work for you.
Hi! I have myfico.com scores and the scores listed on the site are 613, 623, 632. What does this mean for me? I want a USDA loan. How can I get the ball rolling? Thank you!
I am in Mecklenburg County (Charlotte) and looking for a mortgage that can work with my low FICO (600). I have extenuating circumstances that I think they will accept. I have to move by May 1st, how quickly can I get qualified? Would you be able to help me find eligible housing in the Lake Norman area? Thank you!
I am looking to ge into a home with a USDA loan. My credit score is a 590, however I have been at my current job for 7 years. I am a first time home buyer. Do you think it would be possible to get a USDA loan at this time or should I try to increase my credit score? The home I looking to purchase is $40,000.
Shonda – there are several other mortgage programs that you might qualify that are specifically for First Time Home Buyers. I would suggest looking over these tips for improving your credit score, and call us to see what you can do right now 🙂 CONGRATULATIONS!
Cathy – I think we’ve already spoken, but yes, we help people in the Charlotte area all the time. USDA Home Loans do have “waivers” that they will accept, but those normally work for high debt ratios, and folks with middle scores between 640 and 680. Having said that, we’ve seen folks improve their credit scores by 50 points or more pretty quickly! Give us a call, we’ll be glad to help!
LaShaunda, I think we’ve already spoken – but those are great scores! Congratulations! There are other programs that offer no down payment options, which is normally why folks are looking at USDA Home Loans. Most of the time, we see folks who can simply pay a credit card down, and get their scores to pop up 30 to 50 points! Call us, or complete the Application no the top right button, and we can give you a “thumprint” look at your credit scores, and what you need to do to meet the mortgage requirements. You are SOOOOOOOOOOOOOO close!
As of December 2014, USDA now has clear rules that state if your bankruptcy INCLUDED your home, the action of foreclosure (which usually takes place months or even years later) is an action against the property and NOT the person. For example, we had a bankruptcy discharge in January of 2012 and are three years out from the bankruptcy, but our home was just foreclosed in October of 2013. We are eligible for a USDA loan WITHOUT exceptions, because our home was included in the bankruptcy. Please update your information! I have a letter from Tony Hernandez, Administrator of the USDA Rural Development that this information is indeed true.
http://www.rd.usda.gov/files/3555-1chapter10.pdf
HI, I am looking for a USDA home loan. I am a first time home buyer. My FICO scores are 660,619,580. I have been at my current job for 9 years. The home I would like to purchase is 83,300. Is it possible to get approved with my scores?
Yes – it is possible. It is also VERY LIKELY that with 30 to 60 days worth of work, you can increase your credit scores to qualify for the BEST rates for a USDA Home Loan in NC. Call us please, it sounds like you’ve already had a lender pull your credit- and let us do a free analysis of where you are, and how we can help. 919 649 5058
Brittany – The USDA Home Loan Underwriting guidelines did change dramatically in December. I talked to a NC USDA RD Underwriter today, who thinks the way we are presenting it is correct, but a different opinion would help TONS OF PEOPLE who had the heartache of filing bankruptcy and went through foreclosure. I genuinely appreciate your feedback, and will continue to check and with our NC Office for clarification. I’ve also asked them to check with Mr. Hernandez. THANK YOU!
I have had everything approved with my mid score being 642, the problem is with fha they now want a verification of rent and the landlord refused to sign it. What can i do? Im told this will stop me from buying the home!
Also im from ohio!
Tiffany, yes they have to verify your rent payments. Can you get copies of cancelled checks? They should be able to contact the landlord on the phone? They can have the credit bureau do that. Whoever your closing attorney is going to be might be able to convince them that this is part of their fiduciary responsibility as a landlord. If they give out false information, they can be in deep trouble. Call me later this afternoon if these remedies don’t work and I’ll see if I can give you some other ideas. It can work out. 919 649 5057
Thank you for your reply! I havent been on good terms with my landlord. He came to the property without permission and went looking thru my windows. I was babysitting my moms dog and he gave me a 15 day notice to leave the property. (I had paid the rent up for 3 months not making it due until june 2012) and this happened in april 2012. I called the landlord association board and they told me not to leave until he legally took me to court. I have not paid anything but instead have made major improvements to the property. I have not seen or heard from my landlord since the 15 day notice. Im currently still residing at the residence. I know this is very unusual and im just trying to get options. Again thank you for your help.
Tiffany that is an unusual case. If this has been your LEGAL residence, then I’m not sure what the answer is. The problem is that the Underwriter is required to calculate a “Payment Shock” and it sounds like yours would be close to 100%. I still think your best bet is going to be cancelled checks and some agreement showing where you had the OK to only pay for improvements to the house by the owner.
Hello, I’m wanting to buy a home so bad!! My credit score is 591, but I have 2 charge offs from several years back on my credit. I also have a few collections on my credit report that I recently paid off. Also theres like 2 that were paid off in a bankruptcy case years ago.Is there any hope???
Stacey! YES there’s hope! It sounds like you are working off of your credit report – and that’s always the best plan. You do NOT need to go to one of those Attorneys or Credit Companies who charge you, and then try to get items off your report. Don’t worry about the ones that were in the Bankruptcy. Just keep your paperwork.
The most important thing to focus on now is GOOD CREDIT. Do you have any current revolving credit? If not, we always suggest that folks get a Secured Credit Card (or 2). You can get these at the Bank that is located in Walmart.
You are on the right path! Congratulations! I believe you WILL be a home owner!
You can always call us, we would love to be your lender 919 649 5058
I have tried getting a credit card recently to build my credit but I was denied! I have no revolving credit. Just good work history and 6yrs worth of faithful monthly rent payments! and always pay monthly bills on time.
Stacey! This is actually not as hard to fix as you might think. You are going to need to get a couple of Secured Credit Cards. Once you make payments for 4 to 6 months on time – you will get offers for other ones! When you get your “second round” of cards that have much better terms. Stop using the first set. That’s where folks get into trouble (been there, done that). ONLY use those credit cards to fill your car up once a month (for instance) and then pay them right back off.
KEEP SAVING for the other stuff. YOU GOT THIS! Buying a home will usually mean that you need 12 months (that’s ALL) of making payments on 2 cards for 12 months! Yippee!
Thank you for all ur advice. I’m gonna do just that!!!
My daughter and I recently got a prequal for a $100,000 FHA loan with 3.5% down payment requirement.
Can we get approved for a USDA Loan ? Closing cost are expensive the down payment is not cheap either what about the grant for closing and down payment . What can you recommend?
Pamela! This is a great question. USDA Home Loans don’t have any down payment requirements, which makes them a bit cheaper. The closing costs can be paid by the Seller which also helps.
FHA Loans and USDA Home Loans can qualify for the NC Mortgage Grant program, and that can also be used to cover closing costs. There are a NUMBER of ways to make this work. Because it is better for me to give you “specific” suggestions, based upon your situation – I suggest you call us at 919 649 5058
My wife has good credit scores and she is going down as borrower and I have a 580 550 and 600 and im going down as co borrower and I was wondering if We still would have a chance of getting approved with a USDA home rural development loan? Everything else I think were ok, just my credit score might make it inpossible, any help would be great!! THANKS!1
Ray – we can do something called a “Manual Underwrite” on a USDA Home Loan. If you have a lower credit score, we can normally make suggestions that will help get it up too! Give us a call! 919 649 5058
i was wondering if I am crap out of luck for this program. We filled bankruptcy in October 2014 and it discharged January 2015. We sold our previous company to a so called friend of ours and he ended up taking everything we have and not paying the IRS, nor our vendors or us. To top it all off after they fired my husband they put a non compete on him. He is back working and we are now living in our 5th wheel trailer in a trailer park with our 2 kids and 5 dogs:(. Is there any hope for us?
Monica – Unfortunately, USDA does have a pretty strong 3 year wait period. If you are in NC, you might want to contact NCHFA directly and see if they have suggestions. Good Luck! 🙂 -E.
hi my husband has a low credit score of 515 520 537 he also has been recently layed off. where he was making 18.00 an hour. my credit is 600 (620) 635 im a nurse i make 48,000 a year my husband also has a son with disabilty and tht income is 853 a month. since my husband is layed off with bad credit will it mess us up from getting a fha loan and possibly a usda loan and possibly any other loan for getting a new home. we really want to get a new home and a cheap mortgage we are paying 1500 in rent now. also i signed up and waiting for my capital one secured card now. we are wanting to get a house built which will take 4 months we were told. can this work for us please help!!! and what all do we need if so to have to get approved. to get the home built and close on it.
Hello. im trying to buy a house got my preapproval letter. only thing im lacking for closing is canceled checks for rent i pay to an individual i payed with money orders and have some of those receipts and i pay in cash and get back receipts out of a receipt book. I asked my broker about a vor. he said the lenders will say no. i really want this house bad. will this stop me from closing on the house.
We have a judgement that is 2137.00 from 6 years ago. We applied for a USDA loan, and just recently was approved by the underwriters. It was sent to the USDA office for final approval. My question is, should I be worry about the judgement?
PROBABLY. Judgements can attach to a property, just like a Mortgage (lien). Your problem will also be in getting Title Insurance, which is REQUIRED for a USDA Home Loan.
That is only in the event of a Manual Underwrite. If you have a GUS Approval, you will not be required to provide 12 months of cancelled checks.
You have talked to a lender, since you know all of your scores. This scenario works for us, because we have Mortgage Tax Credits, and the ability to do manual underwrites for a USDA Home Loans.
Hello,
My fiancé and I were wanting to get approved for a USDA loan, he has a score of 640 and low debt to income ratio. The only problem is that he has a collection of 1400 from 4 years ago and also a collection of 600 dollars from 4 years ago. My question is would it be better to try and set up payment plans or just leave it alone since its been 4 years, we live in Va. Also if we leave it alone will he be able to get approved with the collections against him or will they even show from 4 years back? Thanks
I am on disability pay, but I do have money for a down payment on a house. $20,000 My question is, would I qualify for a loan having a 659 credit score. If not, what other options do I have in buying a home, if any.
Craig – you would qualify for a house. We can take your disability income x 120% for qualification purposes. Call us! 919 649 5058
Craig – you would qualify for a house. We can take your disability income x 120% for qualification purposes. Call us! 919 649 5058
It will depend on what the collections are for. If they are for medical related issues, probably not – but I’d have to see it. You can call us at 919 649 5058 and we will be glad to give you the scoop 🙂
I sent in.the 502 pre qualify. I.have a high DTI at the moment. Credit scores for my wife and I are around 590. We are about 30,000 in debt but have a family member giving us 20,000 to pay off debt which will make our DTI very low and increase our credit scores.
I make about 45,000 a year and my wife just graduated college and started working in her field 3 weeks ago making roughly 1200 a month. What are our chances of qualifying.
Hi,
I’m interested in the guaranteed loan program. We applied for the other program in March and were approved for a lower amount than we had hoped for. notes from the underwriter were free up some income and we can lend more. My husband also is connected to an eviction judgment from a home he lived in with his parents when he was 19,over 15 years ago. Which we were unaware of until this acceptance. The eviction notice does not show up on his credit report but can be found on circuit court. We were approved before I found and accepted a new job in my same career field that put us over the income limit for the first loan we were approved for. My questions are will we still be aproved for the guaranteed loan and since we freed up over $390 income will me most likely get a higher approval amount and will the judgement he is linked to need to be paid before we can get the loan? Nothing was mentioned about paying it before hand and if it does need to be paid do we have to wait a certain amount of time before we will be approved.
I guess I should have told you we are in Wisconsin. If that matters
The Guaranteed USDA Loan is not offered via mortgage lenders by me – however, any approval that is more than 120 days old, and you now have changed circumstances, will not be valid. The eviction notice likely showed up with a title search was done – I would contact the attorney or title company that did the search, and ask for help getting it taken off.
There are some slight differences about how items “age” off your file based upon the state the judgement was filed, however, 15 years is normally over the limit. I’m not in Wisconsin, so as I said in my other comment, you will need to contact an attorney or title agent to be certain what the rules are in Wisconsin.
I assume from this that you are applying for a USDA Direct Loan (which is sometimes referred to as a 502). Based upon what you are telling me – I suspect you are telling me – my guess is that you are about 6 months away from buying a house. I would counsel you to use that $20,000 wisely, and to add credit as quickly as possible to raise your wife’s score. Sometimes a secured credit card will help. USDA Loan Underwriters will no longer allow us to add her as an authorized used to bring her credit up. If you are in NC, we would be glad to help, you can call us at 919 649 5058
My wife just received a Capital One Quicksilver card and a Target store card wich we do not plan on using. What would you suggest be the best way to use the money and what and how much debt should I pay off first. Thank you for your time. We are interested in buying the house that we currently rent.
You will need to use the Target card at least once every 3 months. I would say like $50 – just to show some activity. I would charge a tank of gas on the Capital One card every month (so $50 or so) and then pay it down to around $20 dollars each month. Paying that little bit of interest will help her score build faster. I don’t know why – I just know it works !
I have a question. My co-borrower (who lives with me now and will do so when we buy another home) has a home she uses as a rental property. She will have 2 yrs of proof (claims on taxes) by the time we are looking to buy another home. Is this going to be an issue with her on the loan for the new home?. I am sure everything else will be fine (scores are 690-730) . Thanks!
Your blog is incredibly helpful, thank you for sharing your expertise! My husband and I have been renting for 14 years, paying off school loans, and growing our family. We love out neighborhood and a house a few doors down will go up for auction ( not foreclosed just liquidating deceased family’s property). Our credit is in the 815 range, no outstanding debt, only 2 credit cards that we pay off monthly. When we went to see a loan specialist he was concerned we didn’t have more open lines of credit. Our other problem is that a 10% buyers premium is due the day of the auction. We know the house is in excellent condition and could possibly be purchased at a bargain. Can we take out a personal loan for the auction and then what are our chances of being approved for an USDA RD loan? We don’t have any savings in the bank or 401k, and gifts from family isn’t an option. Any advice would be helpful.
I am in the market to purchase a home in MS. I do have a judgement which I will be clearing up in September. My scores have improved 605 634 640. Looking to purchase a USDA home. Is there an income requirement? and what is my next step to get the process started?
Thanks
Anthea
We are 26 months removed from a short sale in Califronia. We moved to NC the day after the short sale was completed. Credit scores in mid 600s. Current on rent for 26 months. Found a home with USDA eligibility in Wake County, but we are being told that we are not eligible until 36 months removed from short sale.
Is that completely accurate? I know the guidelines changed last December. Is there any chnace they change back anytime soon?
Thanks! You are a wealth of information.
Josh
Josh, you can call us, there are other options. 919 649 5058
We can not do loans in Mississippi, however, it sounds like maybe you have already seen a loan officer (since you have your scores)? Be sure to find out if the company you decide to work with offers the MCC Mortgage Credit Program! It’s a great benefit, and offered in all states.
You might also qualify for a DAP Program, there are several available. The problem with doing a personal loan is that it’s not gong to be eligible for a “cash out” refinance.
Doug, it’s not going to be a problem regarding getting a new home. They will need to see your taxes to understand the rental income.
I’ve been on disability since 2012, but also work a seasonal part time job since 9/2013. I earned 6175 in 2014 for the job. My disability is $1212 a month. My middle score is 691. ONLY debts are two credit cards with a balance of less than $400 between the two. The land/home package equals $75,000 Am I over the debt to income ratio for this house? And do you see any reason I wouldn’t qualify for a direct/guaranteed USDA loan?
Oops and is my credit score high enough? I have a bankruptcy from 2008 and a medical collection on my reports. Not much I can do about those to raise my scores. I had already paid my credit cards down. Thank you!
Gina – you should be fine for the Direct Program. Good Luck!!
Thank you Eleanor ive been anticipating your answer. I just want to add, I started the loan process with Wells Fargo back on May 22nd and was finally got approved for the USDA guaranteed loan on July 28th …with the stipulation that my seasonal job was going to start back up in Sept. But going forward got word that it would now begin in December. Wells Fargo declined my application after I waited 3 months to get a commitment letter. I was devastated!! I later learned that USDA guidelines say that they go by your past income for 2 years, and can also gross up my disability. Wells Fargo refused to do either and dropped me like a hot potato. Needless to say the CFPB are now investigating this for me! That’s why I’ve been afraid that no one will give me a loan… So do you think I can stop worrying now that it’s in the hands of USDA direct????
And also do you know what the turn around time is? They received my info in the mail this morning…. I’ve read that direct can take a lot longer than a guaranteed loan, Please say it ain’t so!
Thank you!
Gina
Gina! I’m so sorry! We have heard that USDA Direct is a longer process, but if you have problems along the way, you can always reach out to me. Home ownership is worth the effort!
Is an “automatic approval” exactly what it means for an USDA loan and how long does it take to get approved? My scores are 720, 714,& 704. I make 3750 monthly and the house I am interested in is in an approved rural area in North Carolina. Thanks!
Terri – with USDA Home Loans, you have 3 sets of approvals. The first is the Automated Approval – which is the GUS system. That is a currently set up to approve folks, with few conditions, who are close to the ratios and have at least a 680 credit score. The second is the approval from the Bank Underwriter, and then the USDA Underwriter. Please call us, there’s no obligation – but we can definitely run your scenario through the Automated Approval Engine and let you know the results. 919 649 5058
I have been approved for a USDA loan. I’m ready to put in an offer for a home. My question is I just went and added money to my Christmas loan at my local credit union will this interfer with
I have been approved for a USDA loan. I’m ready to put in an offer for a home. My question is I just went and added money to my Christmas loan at my local credit union will this interfer with me being able to close. No one told me l couldn’t.
Hello, I have a middle credit score of 620 with 3 of my credit recently paid off. I have an annual salary of $51,900 and am interested in a USDA loan. I do have a few late payments on the cards that have paid off but everything else is fine. I tried with a few of the local banks but they aren’t willing to help. I have an offer on my house but need to be able to buy another. Do you think I have any hope for a loan?
Kathi – you need a manual underwrite for a UDSA Loan. They will require at least 12 months of on time mortgage payments on your current home. In fact NOTHING can show a past due payment in the past 12 months. If you don’t feel you meet these requirements, you might need to contact USDA Direct.
Nerissa – you just need to keep the documentation, you should be fine 🙂 Congratulations!!!!!
Hi, stumbled across your site while googling usda guaranteed home loan to learn about the program. You seem to be very knowledgeable and helpful. Can you help us in north Florida? If not, can you recommend an outfit here that does like you do with this?
Thanks,
Rob
Hello! My husband & I are trying to get qualified for USDA loan. We know our credit scores but they aren’t quite up to the 640 requirement. We recently pulled out credit reports & have a game plan but we were wondering if you could look at our report & we tell you what our plans are & you advise us if we are on the correct path or if there is something else we should be doing.
Thanks!
Sonja, if you have not called us yet, please do. 919 649 5058 / We are glad to help you with a game plan.
I have a middle score of 643 and about 9 grand for a down payment. I have 8 credit cards with 4% utilization. I have about 3 cc carve offs from 2-3 years ago and a judgment will age off my report in April 2016. I would like to buy a home next year. I have paid everything on time in the last 24 or more months. Would I qualify for a loan?
PROBABLY. I hate to tell someone anything without the full picture, so I’d be glad to look at your situation. Just give us a call at 919 649 5058
Good morning, my middle score is 638 almost 640. No debt/income ratio issues. I have had no late payments in the last 19-24 months. No collection issues. No credit card utilization issues. My credit suffered in 2011-2012 but not since that time. I was told that I needed to wait until my mid score reach 640 for the USDA loan because of my past history from 2011-2012. Is this true?
Susan, if you’ve been 12 months, we can do a manual Underwrite / Approval on USDA Loans. Not all lenders have that available. Call us at 919 649 5058
Hello I’m wanting to purchase the home I am renting now. My credit score is 550_580 . the home I rented prior to this I was there for 10 years and pretty much paid for that house . and I am still in contact with the landlord.so if need be I could get a statment from him and my current lanlord. I have been at the same job for 10 years. I have a credit card of my own and I am also on 2 of my grandmas to help build my credit and show that I have had it for about 2 years. I have paid off prior debt on my credit report . except for some hospital Bill’s. Not sure what else I can do to make my score get higher. And also I must add that the home I want to purchase would be for 120,000 but it just appraised for 166,000. And i am from indiana.
I am in the middle of a divorce. I am exploring options to buy my house from my soon to be ex-husband. Would a usda loan be an option for me? I am listed on the deed, but not the home loan. I would be a first time buyer. I’m in Statesville, NC.
Kelli! We would love to help you. Yes, USDA is a great option for you. Give us a call at 919 649 5058
Niki, I’m sorry I can’t help you in Indiana. However, I can suggest that you contact someone on this list of lenders that work heavily with First Time Home Buyers. If you already have your credit report, please be ready to send it to them so that they can help you buy a house, and get your scores higher.
I am trying to get a usda rural development loan. I have been tracking my scores with my fico.com my scores are 622, 626, and 649. However I read on their sit that these scores most people can see are version 8, and mortgage banks only look at version 2, 4, and 5.. When I checked those for me they were much less 587, 580, and 608.. I don’t understand why the difference. I feel like I should just give up the dream of a home. I am a single mother of 2 girls, and make 68,000 a year. Any advice?
Me and my husband are qualified for $60,000 to $80,000 loan with excellent credit,We found the house
with the help of Realtor, the house don’t have refrigerator,can we ask for that and add it in the loan or they have to put one.This house is a HUD home foreclosure,we bid on it.We are here in Mobile,Alabama.
Leonila – the answer is maybe. Sometimes a refrigerator can be added. That’s a Realtor question
Debra don’t give up! The FICO scores will naturally be lower than the scores we use for a mortgage – but you are so close! Call us to go over your options – 919 649 5058
my fiancee and i are wanting to purchase a home through the usda program, he is new the working field and has only been employed for about a year now. we have been building his credit for the past year and his score is somewhere between 620 and 660, he has 2 credit cards and has been on time with all payments. would he be able to qualify without the 24 months work history?
Yes, he should be able to qualify for a USDA Home Loan in NC as long as he’s had those credit cards for at least 12 months.
Can you qualify for a USDA loan if you own a condo and want to rent it out after you move out?
Only if it is in a different area. You won’t qualify for a grant either.
I have been approved for a USDA loan but have a credit card judgment against me that must be paid before closing. I have contacted the collections agency and their attorney for 2 weeks now. The attorney says the account is closed with them but collection agency says its not. Its been back and forth. I finally was able to speak with someone in an higher capacity that was to have the case reopened but now I can not reach anyone at the Attorney office or get them to return my phone calls. Judgement was back in 2011. What can I do, I am about to be a nervous wreck. Could this keep me from closing on my house although I’ve tried every means to get this settled?
Darlene, So sorry you are having this problem. Maybe your lender can put you on the phone with the collections attorney?
I have a bankruptcy from 09/2014, but my scores are around 670. I filed bankruptcy due to medical reasons which have since been resolved. Would it be possible to get approved? Or would I still need to wait the 3 years? Also I ahve student loans totalling $35,000.00 that are not yet in repayment. How will these be calculated in my DTI? I’ve heard 1% and 2% of the total balance. And I have also heard that if you can get something in writing sayinf what your payment will be they will accept that.
The student loans will be 1% of the balance. I do believe that USDA will require the full 3 years. I spoke with an UW this afternoon about a similar situation.
Does your company service Alabama?
Unfortunately we do not do USDA Loans in Alabama
Okay. Thank you for the response.
Hello! My husband and I tried for a loan about 3-4 years ago. We both have improved our credit since then. His credit now is around 677-710 (and continuously going up because he has paid his credit card off with just 2,000 out of 5,000 to go) and mine 620-642. We have a 100% on time payments percentage. We both have been at our jobs for 5 years, except I recently just quit and getting another job. We are looking to buy a house by January 2017. Do we sound like good candidates to apply for this loan? We have been trying to buy a house and we have been working so hard to do so. Thanks.
YES!!!! Congratulations on working so hard! If you are in NC, please call us so that we can help you. It’s not too early to talk to a Loan Officer so that we can tell you about the upcoming changes to USDA, and make sure you are comfortable with payments, closing costs etc. 919 649 5058
Thank you!! And I was googling around to see more about the USDA and just happened to read everything on here, except we live in Kentucky. Thank you for your help 🙂
I have a good friend who is a loan officer in Kentucky! You might want to contact Joel Lobb – If you call him, please tell him I referred you 🙂
Joel Lobb Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
phone: (502) 905-3708
Fax: (502) 327-9119
kentuckyloan@gmail.com
Seriously that is amazing, thank you SO MUCH!!! I’m wondering if he will do this considering I live an hour an 15 mins from him. Would that matter? Definitely going to give him a call next week! 🙂 thank you again so much!
We do most of our business over the phone, so that’s not a problem. Congratulations on your decision to buy a house!
Eleanor,
Hi!
You wouldn’t happen to have a good friend in Tennessee would ja’? I’m hoping to find a lender asap 🙂 Thanks!
Unfortunately I don’t – but I’m at a mortgage conference right now in California – let me see if i can go make some friends 🙂
Hi,
My score is around 700 but I am self-employed and low income. Can I apply USDA loan? Thanks.
Yes! We would love to help, please call us at 919 649 5058
Hi, I have a question. My credit score is around 590. I have a judgement from 2013, which I know must be paid to qualify for USDA. However, I also have several charge offs from 2013 and these keep getting sold to new collection agencies and reported as new collections. I spoke with a realtor today and her advice was to wait until every thing falls off in 2020, because according to her everything would have to be paid off to qualify for a USDA loan, and the low score would drive up the rate. Is this true in your experience? I am looking for a home in Gaston County NC. I am an assistant nurse manager with stable income. The decline in credit was due to pregnancy related complications leading to job loss in December 2012. I managed to stay afloat till around March 2013 then several loans defaulted….any hope?
That is not our experience. We do a ton of mortgage loans in Gastonia and Belmont (and that area). You definitely have hope. If you have any credit cards, go ahead and pay them down to around $20 first. If you don’t have a credit card, go to the Bank in Walmart. They will open a secured credit card for you. Having revolving credit that has on time payments for at least 6 months will pop your scores up really quickly. Call us anytime and we will be glad to tell you what our experience tells us regarding how long you will need to wait. Most creditors take pennies on the dollar to settle. We will be glad to walk you through this process 919 649 5058
Thanks! Eleanor.
I want to buy a house about $200,000 in Cabarrus but my gross income is $27,000, and I am first time buyer. How can I make it? Thanks.
Hey! You might need a non-occupying co-borrower – or you might be OK with using a Mortgage Tax Credit. It’s hard for me to give you exact numbers without more details. Could you please apply online, or call us 919 649 5058 and we can give you the best information
Thanks, Eleanor.
Hi, Eleanor my husband and I have credit scores in the low to mid 600’s. We live in NC and we are hoping to purchase a home around this time 2017 or sooner if possible. We would like to use USDA but we know are scores need to be a bit higher. We have both been on our jobs for 7 plus years. We have a great income combined. We each have 2 collections on our report mine were last reported on 5/2016 and 11/2016 this one is a medical bill. My husbands were last reported on 6/2016 and 10/2016. Do you feel as though we are looking at the right time frame or will we need to wait longer due to our collections?
Thanks so much
Aundrea – yes, 6 months should be a good time frame. The most important things to do? 1. Don’t do anything with the collections. Don’t dispute them, don’t do anything. You might have to pay them off before you close, but let us figure that out when you apply. Be prepared for that. 2. Don’t allow any NEW Collections go onto your reports. If you get the letter saying they are going to send you for collection – send them $20, make a payment plan. Additionally, if you have credit cards, pay them down. If you don’t have any revolving credit – go to the Bank at Walmart and get a secured Credit Card. Having multiple revolving credit cards open for 6 months will raise your scores. I say this because if you are looking at your scores on Credit Karma – they will be slightly lower for a mortgage report. Consumer reports and mortgage reports are slightly different. When you are ready, give us a call! It’s not too early to work on this! Congratulations!! 919 649 5058
my husband and I have a 590 and a 619 equifax credit score only have a few (or one) tradine account on our credit history, and we have no way of providing proof of rental history (we live rent free in a house that my dad owns and he has allowed us to live rent free in order to save money for our new home purchase) is there a way to get approved when the underwriting process comes around? We already got a pre approval but now we are stuck in a stand still point because of all of these risk factors. We only have one revolving credit card account and even that one account has only been open for 6 months. Please let me know anything I can do in order to move this process along??!!!
Katie, unfortunately, you need to wait. Go to the Bank at Walmart and open up two secured credit cards. Even if you started paying your dad rent, it wouldn’t be a long enough history.
Hello Mrs. Thorne, I have never bought a house and am so ready! I have been keeping an eye on my credit for the past year to improve it to be able to qualify. Unfortunately i didn’t know that the scores from credit karma would be so different from the ones the lenders pull. The day before yesterday all of my scores were a little over 600 applied for a FHA home loan yesterday through a lender nerd wallet recommended based off my scores and income and to my amazement he told me my scores were not high enough. On his end my middle score was like a 568 which he said is Trans Union so i paid for their service to get the score directly from them last night and it is showing at 598 and on credit karma it is showing the same 598 today. I know him pulling it yesterday probably dropped it some, so what I am asking is there any chance I could get approved for a loan? We really want a FHA or USDA loan we meet the income limits and the house we have been looking at are in the USDA limits as well. The only things showing negative on my credit are really old Medical Bills on both and my husband has a really old student loan from 2002. We purchased a car in April of 2016 in both names and have made all payments on time. We purchased another vehicle in January 2017 in both names and have made all payments on time. The lender who pulled my credit said there is an auto loan for $24,000 showing on my credit from 2007 hurting my score significantly, but that is not showing on my end. It is through the company i currently have a car loan through from April of 2016. I don’t see how they would have given me a loan if that was on there. I am getting so discouraged. I don’t know who to trust and help me get a home I feel like that company really didn’t care to help me he just told me to get my scores up and try him again in a month! We both make decent money and I have been at my current job for almost 4 years, and we can provide a rental history. Is there any hope for us? Also my husbands scores are in the upper 500s close to 600.
Thank you for any and all help! 🙂
Amanda, I don’t know what lender you talked to – but they don’t know credit. What State are you in? If you are in NC, please call us 919 649 5058. If you are in another State, reply and I’ll give you resources for your state that work with First Time Home Buyers, and understand how credit works. It looks to me like you don’t have enough credit. If you will get Secured Credit Card (2 would be better) and follow these suggestions, you should be able to have the scores you need within the next 6 to 8 months. Don’t get discouraged! Just find the right folks to work with!
My wife and I are looking to buy our first house not sure what we need to do would like a ok help and advice on how we should go about doing that.
Thanks
First thing to do is talk to us. We help walk First Time Home Buyers through this process every day. We offer MULTIPLE no down payment loans, and would be glad to help you find the program that works best for you. 919 649 5058
My husband and I were investigating as to how we can bring our credit score up from 576. It has plummeted since November 2013 due to collections that we aren’t sure what they are for. There are 7 collection action items and today I was served with a summons from Cap One for an unpaid credit card. I have 20 days to respond, I had no choice but to solve this problem myself, so I make research and found this credit coach cyber hack, I contact him via gmail (cyberhack005 AT gmail DOT com) and asked
1.Can you remove all the negative on my credits
2.How long will it take you to get the job done
3.Will the correction reflect on my score. and he answered my questions respectively:1.Yes I can 2. 72 hours 3.It will reflect on every credit agency file. I give him a try and he made my dream come through in a short period of time..This is awesome!
We are not a credit “fix” company. We help folks buy a house. In that process, we normally have to help folks get their scores up. Your problem is likely not old collections. I suggest looking at the balance on you credit cards, versus the credit limit. If there’s less than a 40% gap between the 2, then you need to pay credit cards down. If you don’t have any credit cards – that is the problem. You should read this (note: we make zero dollars providing this information, we simply want to help folks buy a house!)
Does improving your score while currently closing on a home a bad thing? I had some student loans and my mom was helping me with them and she went ahead and wiped them out without asking me prior, Will I lose my home? I’m scared I will
NO, that is perfectly ok! Thanks for asking! I’m so sorry for the delay, my dad was in the hospital from January 31st to February 23 – and I’ve just been trying to keep my head above water!
My wife’s credit is shot! Mine isn’t much better but she has a defaulted student loan that I’m sure will prevent us from qualifying together. I do think my credit is strong enough to be approved stand alone. I have read that USDA does not require both of our credit application. Is this true? Can I be approved and purchase without her being an applicant what-so-ever?
Robert her income will still be considered for USDA to be certain you are not over the limit, not to help you buy a bigger home… you can buy a house just in your name. Call us for more information 919 649 5058
I am currently working towards obtaining an USDA home loan, but I was wondering how do they figure the amount that they will approve you for? Is it soley based off just income?
The USDA Loan program really only has 3 requirements. The Household income has to be below the maximum limit set for the County and must be enough to meet the debt to income guidelines, credit must be current with no late payments in the last 12 months, and the house must be located within the USDA Loan Eligibility Map “footprint.” Here’s more information Please call us, we’d love to help you with you USDA Home Loan! 919 649 5058
Hello Eleanor, I was wondering if I would qualify for the USDA loan. I have been employed at my new job for 6 months. I have always worked but I am new to my field. I have a very good credit score over 700 with over a year of great credit history. I am currently on section 8 but I would rather go for the USDA loan instead of assistance through HUD. I would like to have my home built. Will my new job effect me getting a loan now? Although I have well over 20 years job history. Also how can I find a list of all rural area’s to build on or purchase a home?
Joyce, I’m so sorry fr the delay in writing you – my mom died 12/23 and everything is behind. Here is the link to the USDA Maps, you can find areas that qualify. We do the USDA Guaranteed Loans, that have good terms. On the site that has the mas, you will also see USDA Direct. As you are currently on Section 8, you might find this branch of USDA to also be helpful. If you’d like to build a home, you will need to find a builder who is developing within the USDA footprint. That’s fairly easy to do – all of Johnston County qualifies for the program. In fact, there’s a portion of every county in NC that qualifies for USDA Home Loans! Best of Wishes for 2019!
Does the USDA still disregard IBR student loan plans and use the full 1% of the student loan balance against you or did that change?
Yes sir – that’s how that works