USDA
Guidelines

All USDA loans must be underwritten by the Rural Development Guaranteed Underwriting System and underwritten by the Fannie Mae desktop underwriter system

Borrower Eligibility
– All borrowers must occupy the subject property
– All borrowers may not have been suspended or debarred from participation in Federal programs
– US Citizens or non-US Citizens who are legally present with lawful status
– Borrowers who would not qualify for credit on a conventional mortgage loan as defined by USDA

Salaried | Hourly Borrower(s)
– Two-year employment history must be documented via the two most recent tax returns- Previous two  years W-2s
– Recent paystubs to illustrate earnings for the previous 30 days

Minimum Credit Score
– Minimum credit score of 580 required for all borrowers, regardless of Automated Underwriting decision

Minimum Loan Amount
– Minimum loan amount $125,000 for all property types

Student Loans
– Underwriting may use the payment on a current credit report or a recent statement for qualifying purposes
– Otherwise 0.5% of the outstanding loan balance reported on the credit report will be calculated to determine the monthly obligation

Mortgage rating
– No lates accepted in the last 12 months

Qualifying Ratios
– Current guidelines refer to the Rural Development Guaranteed Underwriting System response
– Traditional guidelines are capped at 41% maximum debt to income

Rental Income
– Will be determined by the supplemental income/loss reported on the respective Schedule E from the two previous tax periods if the income was received for 24 months or more

Reserves
– Not required

Eligible Properties
– Must be located in a rural area as defined by USDA Rural Development and cannot produce income

Appraisal
– The appraisal must not have be certified more than 150 days prior to closing
– Appraisals must be completed by a qualified appraiser that can confirm the property meets minimum HUD Handbook standards and meets meet the Uniform Appraisal Dataset (UAD) requirements set forth by Fannie Mae and Freddie Mac

Seller concessions
– May not exceed 6% of the sales price

Bankruptcy
– CH7 Bankruptcy requires 36 months seasoning from discharge date
– CH13 Bankruptcy must have been discharged at least 12 months prior to the loan application

Foreclosure
– Minimum 36 months seasoning from completion