Outstanding collections and balances may need to be paid out before applying to get approved.
USDA does not have a hard floor on FICO scores, however, it will be very difficult to obtain an approval with scores below 620. There must be very serious extenuating circumstances for the underwritter to consider issng a comittment letter.
USDA guidlines closely mirror those of FHA excpet for the property eligibilty requirements. Anyone can check the eligibility of an addrerss at the USDA website:
Aside from that, some individual lending institutions offer their own in-house programs. For example, State Employees Credit Union offers it's members 100% financing with very competitive fees. Your credit score may be an issue if you go this route.
You may want to look into credit counseling to see if you could boost your score up in the next 3-6 months. Sometimes just eliminating a few inaccuracies could make a huge difference!
As the others have already noted, most loans will require at least a small 3.5% downpayment in order to qualify the buyer for a loan. I might also add that when individuals in the real estate industry state that a "FICO score must be at least XXX" to qualify for a loan, the mortgage broker or Realtor is referring to the "mid score" or "middle score" and not to the highest credit score provided by one of the three reporting agencies--TransUnion, Experian and Equifax. So while TransUnion may have your FICO listed at 630, if the other scores are, for example, 580 at Equifax and 600 at Experian, then the mid-score will be the exact middle between the highest FICO score (630) and the lowest (580) and, in this case, would be 605.
To learn what mortgage programs are available in your area or if you qualify for any of the current loan programs, talk with a qualified mortgage broker or banker/lender in your area. You can also obtain a free copy of your credit report once each year through http://www.annualcreditreport.com.
Grace Morioka, SRES, e-Pro
Area Pro Realty
San Jose, CA
There are a few restrictions and its is based on the property location and income in the household.
This is the link to the eligibility page. The credit score is close but you should be fine. The loan is underwritten through an automated underwriting system called GUS. This is a givernment loan used system that RDA has all files go through. They require a minimum score of 620.
I am very familiar with this program and would like to provide assistance if you need it.