How many different ways can you get USDA loan approval?
In today’s video, I will explain how the USDA program can maximize your home loan qualification and also break down the different ways you can obtain a USDA Loan Approval.
However, before we get started, don’t forget to download our USDA Free Resources which is a great starting point for valuable USDA tips, understanding guidelines, and further explanations on proper qualifying steps.
What are the different ways you can get USDA loan approval?
As a USDA approved lender, we offer in-house underwriting which is a tremendous advantage to the USDA loan approval process. When underwriting a USDA loan, we will look at both automated and manual USDA loan approval types.
As a starting point, the Guaranteed Underwriting System (GUS) was developed as the automated underwriting system (AUS) to automate the process of approving USDA Guaranteed Loans. As defined by the USDA:
“GUS is a tool that helps evaluate the credit risk of the loan request. It compliments, but DOES NOT replace the considered judgment of experienced underwriters”
While a certain credit score does not guarantee approval, a 640 minimum qualifying score is required to be eligible for acceptance through GUS. If the minimum credit score is met combined with the applicant obtaining an “Accept” response through the underwriting system, it can provide the following benefits:
- Reduced documentation requirements which can help improve processing time;
- Higher Debt-to-Income Ratios which equals higher a higher USDA qualifying sales price;
- Exceptions for Previous Adverse Credit History; and
- Eliminating the need for Verification of Rental History.
Remember that not all lenders utilize the GUS system so make sure you are working with a USDA Approved Lender who knows how to maximize the benefits offered by this unique program!
When the GUS Eligibility response is either a “Refer” or “Refer with Caution”, a more stringent review of the loan file will be required under USDA manual underwriting guidelines. Manual USDA loan approval is more rigorous and document intensive, but we are more than willing to go to bat for our borrowers!
Manual underwriting can allow for the following:
- Lower Credit Score Requirements;
- Use of Non-Traditional Credit such as Utility Bills, Rental History, etc.;
- Limited Credit History; and
- Exceptions for Bankruptcy, Foreclosure, and Short Sale Waiting Periods.
Please note that Manual Underwriting for USDA loan approval is NOT offered by all lenders. When properly utilized, manual underwriting is an important tool that can provide the ability for USDA loan approval!
As a USDA approved lender, we also understand that every scenario is different and not everyone fits into a certain box, which is why it is so important to know all the ways you can get USDA loan approval.
Remember, we are just a phone call away! If you are in need of a USDA approved lender who has experience and expertise, just simply call (800) 806-9836 Ext 280 or email SeanS@MPLX.org and we’ll show you the “Metroplex “difference!
As always, I want everyone to make it a great day and look forward to seeing you right here for the next tip of the week!