Do collections have to be p/o on RD loan before closing?

[Anonymous]

My husband and I pre-approved for a RD Guarantee Loan due to both of our credit scores being above 620.  We are now in escrow on a new construction home.  LO said that file was sent to processor (not UW), and that they requested a letter of explanation for some collection accounts that my husband has.  I sent this letter last week and have not heard anything back.  My question is will we have to pay these collection accounts prior to closing even though we qualify for the Automated Underwriting?  Our file has not been sent directly to the UW yet because the house is not completed and we do not have the appraisal.  Just trying to get an idea of how much money we need to set aside.

Thanks!

[hawkeye33]

My understanding is that it's not necessarily an absolute requirement for the program but that the lender's UW may still make that a condition. Part of it may be based on the explanation. Part of it may be other things in your file. I would probably move forward under the assumption that they will need to be paid and then be pleasantly surprised if you don't have to.