Do USDA Loans Require Verification of Rental History?
Do you need to prove rental history in order to qualify for a USDA loan?
Everyone’s USDA qualifying situation is different and rental history is one component of that. That’s why today we are focusing on when rental history is a requirement and when it is not.
Remember to make sure you are working with a lender that understands the USDA program! Keep in the know with our free USDA resources. Download them all here!
USDA Loan – Rental History Requirements
As a starting point, USDA guidelines state that in cases where the qualifying credit score is below 680 and there is rental payment history, the lender should obtain a rent payment reference either as:
- Part of the credit report, or
- Directly from the landlord, or
- Through canceled checks covering the most recent 12 months prior to the loan application.
As USDA guidelines state, it’s the “lender’s responsibility to confirm the applicant’s history of payment towards housing expense is acceptable”.
The documentation to prove rental history is dependent on how rent is paid and the type of landlord you make the payments to. Just note, when an individual is living with family or rent-free, they do not have a verifiable rental payment history.
Remember, “one rent or mortgage payment paid 30 or more days late within the last 12 months is an indicator of unacceptable credit”, unless further consideration is used due to extenuating circumstances.
When is Rental History Not Required for a USDA loan?
Here are the situations where a USDA loan would NOT require verification of rental history:
- USDA Applicants with credit scores of 680 and above are not subject to verification of rent or housing history
- USDA Loans processed through the GUS underwriting system that receive an “Accept” response are not subject to verification of rent or housing history.
In summary, USDA loans don’t always require verification of rental history, but when they do, it’s dependent on how your rent is paid and the type of landlord you make the payments to.
Have you been denied for a USDA loan due to rental history?
If you have been denied for a USDA loan due to verification of rental history, please call or email us today and get access to a free expert second opinion!
(800) 806-9836 x 280
P.S. – You can also download our “USDA Blueprint for Success” by CLICKING HERE