How can you qualify for a USDA loan with no credit history?
How can somebody with limited credit history or even no credit scores at all qualify for a USDA Rural Home loan? As you can imagine, this makes the USDA qualifying process a little more difficult, but it is still possible!
Helpful reminder when you try to qualify for a USDA loan with no credit history.
Underwriting will require proper verification of rental history. In cases where there is no credit history, underwriting guidelines will require that you show 12 months of cancelled rent checks or a verification of rent form completed by either an apartment complex or management company.
However, a private landlord verification of your rental history would not be sufficient on its own. If you are renting from a private landlord, you would also need to provide cancelled rent checks to document the payment history. Paying rent by cash or money order is not advisable or an acceptable form of rent verification with underwriting.
Alternative forms of credit history will also need to be documented. Customarily, these are accounts that are not reporting to the credit bureaus. Common examples of these are water, electricity, cable, and phone bills. We will need to verify anywhere from 2 to 3 of these type of accounts with an on-time payment history over the last 12 months.
Although not underwriting requirements, strong compensating factors can help strengthen your USDA qualifying ability such as:
Please remember that all scenarios are on a case by case basis, and minimum credit qualifying conditions may apply.
These situations take both experience and credit understanding, so let our unique USDA expertise help clear these all too common qualifying hurdles.
Qualifying for a USDA home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the USDA loan process, it is a match that can open the door to homeownership.
If you are looking to purchase a home within the next 6 months download your free USDA Blueprint for Success! This is a great educational resource for both buyers and Realtors.
For more immediate scenarios, click here to apply online for a USDA mortgage today!
So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.
Just call or email to discuss your scenario and let us show you the “Metroplex” difference!
Toll Free: (800) 806 – 9836 Ext. 280
And don't forget, we are known for returning calls, replying to your emails, and responding to voice mails.
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Metroplex Mortgage Services
Toll Free: (800) 806-9836 Ext. 280
NMLS ID# 185288
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8622 N Himes Avenue
Tampa, FL 33614
FL, AL, TN NMLS# 185264
TN Mortgage Lender License #3500
13612 Midway Road, Suite 333-05
Dallas, TX 75244
NMLS Branch License #356690
We lend in the following states: Alabama, Florida, Tennessee & Texas.
Any loan program may require sufficient equity and certain conditions may apply.