What credit score qualifies for a USDA loan?
Today’s video tip will cover what credit score qualifies for a USDA rural housing loan along with additional USDA qualifying credit guidelines.
What credit score qualifies for a USDA rural housing loan?
USDA Rural Housing loans are unique with both the benefits they offer and their qualifying guidelines. With that being said, minimum qualifying standards must be met and part of that begins with what credit score qualifies for a USDA loan.
So, what credit score qualifies for a USDA loan?
USDA guidelines, state that applicants with credit scores of 640 or greater meet the minimum credit reputation, however they further explain: “A credit score in its self does not indicate that the applicant’s credit reputation is acceptable. Even when the credit score exceeds the minimum requirement, the lender must determine that each applicant, individually, and all applicants collectively, have an acceptable credit reputation.” Automated Eligibility through the Guaranteed Underwriting System is possible with minimum scores of 640, while manual underwriting is available for scores below that mark. When working with manual underwriting, not all lenders offer this service along and varying lenders can have their own minimum score criteria. USDA Guidelines further advise: “Loans with credit scores of 580 or below should not be approved.” As I have mentioned before, remember that a specific credit score does not guarantee approval and minimum credit conditions will have to be met when determining USDA loan eligibility.