Refinances can have 0 x 30 mortgage lates in the last six months. Previously 0 x 30 in last 12 month
Language has been added for minimum of three tradelines (non-traditional credit may be used)
At least one applicant whose income and assets are used for qualification purposes must have 3 trade lines for 12 months (the trade lines can be open/closed/disputed/authorized use). GUS “Accept” recommendations that cannot meet these guidelines must be downgraded to “Refer”. In the case a loan has been downgraded , non-traditional credit is allowed
USDA guidelines for Bankruptcy of 36 months. Shorter periods may be allowed if documented extenuating circumstances.
Credit reports cannot be more than 120 days old when the loan is closed. This rule now applies to new construction as well.
• If the collection balance is equal to $2,000 or greater, the underwriter must; require payment in full or verify payment arrangement with creditor and include monthly payment in ratios, or utilize 5% of each loan balance in debt ratios.
• If the collection balance is less than $2,000, the underwriter determines if payment in full is required, underwriter must document the decision. Applicants that demonstrate poor repayment of obligations should not be granted underwriting exceptions.
• Medical collections do not have to be paid.
• Federal judgments must be paid no exceptions allowed. Non-federal judgments may remain open IF there is evidence of repayment for 3 months prior to loan application. Prepayment for the 3 months is NOT allowed.
• When determining student loan payments, include the greater of 1% of the outstanding loan balance or the verified fixed payment reflected on the credit report. Monthly payments on credit report less than 1% of loan balance may be used when evidence from loan servicer verifies applicant is on a fixed repayment plan that is not subject to change.
• Long term debts with more than 10 months remaining must be included in the debt ratios. Rule of 6 months or less was removed.
• Mortgage Credit Certificates are allowed. Lender may consider the tax credit as a deduction from the monthly PITI payment.
• Payments for foster children and adults are not eligible for repayment income.