Home Buying in 48430>Question Details

Bobbyandheat…, Home Buyer in Fenton, MI

Actual requirements for USDA loan

Asked by Bobbyandheather Standal, Fenton, MI Fri Jul 26, 2013

My husband and I would like to look into getting pre-approved for a mortgage using the USDA loan. We have heard many conflicting things in regards to the qualifications for this loan. I do know the area we are looking to purchase (Fenton/Linden, MI) does qualify for this type of loan, but we are unsure of the credit requirements. He and I both have a score higher than 640 (He is 700, I am 681), and our combined income is lower than average median income for the area; aside from those guidelines what other underwriting requirements are there? The main concern I have is we were told that there must be a total of 3 open tradelines PER person applying and they need to have been open for 12 months. I have my car payment and a credit card, he has a student loan and a credit card but neither of us have 3 active tradelines. I have talked to many different people and some have heard of this and others have not. ANY help would be greatly appreciated!!

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I have a few Mortgage Officers you can work with and keeping in mind what Trevor said below. Getting the pre-approval is the first step. If you are not working with any Realtor yet to find a home in the Fenton/Linden area, please contact myself Steven Melchor a.k.a. Melch 810.513.1561 or my Buyer Agent, Andy Cool, 810.241.0857. We are very knowledgeable in the area and working through the mortgage processes.

What type of home are you looking for?
0 votes Thank Flag Link Sun Jul 28, 2013
Good afternoon Bobby and Heather,

The credit requirement you mention is what we in the mortgage industry call an "overlay" meaning that requirement is specific to the Lender, not to the program. Lenders do this to meet internal company guidelines and the "overlay" is on top of the basic loan program requirements.

Further, since you are married, your Lender should run a joint credit report, not separate reports. Not every Loan Officer knows to do this.

I closed a loan last year for a young couple by running their credit report jointly. The previous Loan Officer they were working with told them they weren't qualified because the husband didn't have sufficient credit. With a joint credit report the "trade" requirement should be easily fulfilled in your case.

I'd recommend you locate an experience (minimum 20 years) Local Mortgage Banker. Stay away from regular banks; a Mortgage Banker is a specialist and is also licensed, a big difference from Loan Officers at regular banks.

Seems to me you should be easily qualified for a USDA loan once you begin working with the right mortgage professional.

All the best!

Trevor Curran
NMLS #40140

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0 votes Thank Flag Link Fri Jul 26, 2013
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