Mortgage Credit Guidelines
The credit guidelines for this home mortgage are simple, straight forward and
very flexible. Don't get the idea that this is a bad credit mortgage
because it is not. It is flexible and you will see how everything
about this mortgage plays together.
Credit Score:
If the credit score is 620 or above the credit is considered
acceptable. This is so cool. If the score is 620 or above the
documentation is streamlined as follows:
- No rental history is required
- No credit waiver is required if there are derogatory trade lines
like bankruptcy, foreclosures, or late payments for whatever. The only
exception is Federal debts.
If the score is below 620 a full manual credit assessment must be
done by the underwriter. Indicators of unacceptable credit
history for this mortgage loan are:
- More than one 30 day slow pay in the last 12 months
- Foreclosure less than 3 years old
- Tax lien or delinquent Government debt with no arrangement for
re-payment.
- Judgment outstanding with in the last 12 months
- More than two slow rental payments in the last 12 months
- Account converted to a collection within the last 12 months
- Chapter 7 discharged for less than 3 years
- Foreclosure less than 3 years
- Chapter 13 discharged for less than 1 year
It is important to note that the underwriter can issue a credit waiver
for any of these issues with proper documentation that proves that the bad
credit was beyond the control of the applicant, were temporary, and causal
factors have been removed. Underwriters must also consider layered
risks in addition to low credit scores. These are covered on the underwriting
page.
Credit scores below 580 should not be considered if there is any
derogatory credit and there must be extraordinary compensating factors.
In addition to all this the lender must obtain a clear CAIVRS number
for each applicant. They must get 12 months documented rental
history, however this is only required if the credit score is less than
620.
An RMCR or Tri-merged credit report is preferred but a
dual-merged report will be accepted.
Non-traditional credit is acceptable if traditional credit is not
available. There is a 3 reference minimum and no other risk layers
are allowed.
USDA
Funding Depleted
|
