11-11-2011 04:20 PM
I am really glad I found this forum and even happier that I am starting to rebuild my credit after a bankruptcy.
I have read some success stories about people getting USDA rural dev guaranteed loans after bankruptcy and foreclosure in less than 36 months. I am seeking out how to do this and if there are lenders that will do this. I did read the guidelines and I saw that an exception can be made for unacceptable credit history. I got divorced (FHA does not see this a extenuating) and then filed chapter 7 after my ex filed. The hous is not in foreclosure I am trying to sell it or get a loan mod or something but I do want to move, as this house is too large and the location is not ideal for me.
With that being said it is possible that I could get a USDA loan before the 36 month timeframe elapses? My credit score is at 630, but would definitely be where it needed to be before I attempted to purchase a home (not looking to close until May 2012 or later). I'd hope to short sale my home by then (or maybe break even on it).
Please tell me what I would need to do or a lender or something to try to find out more. I have more details regarding bankruptcy filing if needed.
The new house would be occupied by myself, boyfriend, his son and my niece and nephew so we do need housing.
11-13-2011 10:47 AM
Since USDA garunteed loans are done directly through banks you deal with both bank requirements as well as rural development requirements. Rural development guaranteed loans are not as flexible with approvals after bankruptcy as a rural development direct loan can sometimes be. Per guidelines with rural development loans you must allow 36 months or three years to go by before approval after a bankruptcy Most posters, including myself, who have had success being approved before the 36 month requirement have applied for the USDA direct loan. In addition our credit scores have met the requirement of a mid credit score of 640. For rural development direct loans, having a mid credit score of 640 or above Rural development(for direct loans) is not required to do a more indepth credit analysis. In addition, Rural development is more willing to forgive additaional layers of risk the higher the mid credit score is. I would contact your state office for their requirements concerning this matter. I called our state office before application and was told for a rural development garunteed loan 3 yrs had to go by before I would be eligible for loan approval. I hope this helps.
11-14-2011 08:30 AM
Tagging on to the post indicating less credit analysis is required for an applicant with a 640 credit scores (at least on the guaranteed program, I would contend that the lender still has the responsibility of in-dept credit analysis and due diligence for all applicants regardless of score. However, the lender is not required to submit supporting documenation for the waiver if the score is at 640. In other words, having a 640 score does not facilitate a waiver itself. It just reduces the amount of supporting documention the lender has to submit to USDA for the loan guarantee. It is noteworthy, however, that the streamline documentation allowance is not granted in the case of foreclosure <36, BK7 <36, or BK13 <12.
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