Hello everyone,
I'm new here but have lurked for a while.
My income qualifies me for a USDA direct loan. I submitted my pre-qualification last Friday (4/28), credit was pulled 5/1 and I received a letter from the USDA on 5/3 asking that I call them to discuss some things they found on my credit report. I spoke with a specialist who told me my DTI and income looked good but she could not approve me because of a $2237.00 Medical collection from 2013. In 2012 I was a passenger in a car that was in an accident and the bill is from physical therapy I had to attend so I could regain my strength and walk normally again. Anyways - I always thought medical collections were not taken into account by the USDA and the specialist told me that because it was such a high amount it would need "taken care of". She also told me the UW only waives medical collections if they are under $300.00.
This is contradictory to everything I have read about USDA loans. Do I have any recourse or am I boned until this collection ages off or is deleted? I'm not willing to pay it as the auto insurance was supposed to cover my medical costs. I have disputed this with the CRA in the past to no avail.
FICO 8 scores are 650 TU/660 EQ/627 EX (the collection is only report to Experian).
