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USDA Guaranteed requires collections paid off?

Established Contributor

USDA Guaranteed requires collections paid off?

This is news to me, that collections have to be paid off 12 months before approval???  I didn't see anything about that in the guidelines that I read and the LO didn't mention it to me when I said I was looking at reapplying in 6 months...is this really true?

Starting Score: 10/1/2011 EQ 568 TU 593
Current Score: EQ 664 TU 700 EX 701 (FAKO)

5 REPLIES
Regular Contributor

Re: USDA Guaranteed requires collections paid off?

I had several unpaid collections that were not required to be paid off......I still need to deal with them on my own but was able to close on my house last month.


Starting Score: EQ: 540 TU: 606 EX: 605 (all from lender on 7/26/11)
Current Score: EQ: 601 TU: 648 EX: 642 (from lender on 8/4/11)
Closed on our home on 8/31/11!!!!
Goal Score: 620-650 to start

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Senior Contributor

Re: USDA Guaranteed requires collections paid off?


thankfulheart wrote:

This is news to me, that collections have to be paid off 12 months before approval???  I didn't see anything about that in the guidelines that I read and the LO didn't mention it to me when I said I was looking at reapplying in 6 months...is this really true?


I think she probably said all collections in the last 12 months have to be paid off. 

STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
Valued Contributor

Re: USDA Guaranteed requires collections paid off?


Booner72 wrote:

thankfulheart wrote:

This is news to me, that collections have to be paid off 12 months before approval???  I didn't see anything about that in the guidelines that I read and the LO didn't mention it to me when I said I was looking at reapplying in 6 months...is this really true?


I think she probably said all collections in the last 12 months have to be paid off. 



+1 -- I agree with Booner, this is probably what she meant.

Starting FICO Score: 10/10: TU 498 | EQ: 502 Current FICO Score(lender pull): 09/14: TU: 784 | EQ: 752 | EX: 784
Collections Removed: Hunter Warfield, CBE Group, Merchants Credit Guide, EOS-CCA, Enhanced Recovery, Portfolio Recovery, UCB, American Collection Company, Medical Business Bureau, Jefferson Capital, Credit Portfolio Associates, FCO, LVNV, Convergent, Armor Systems
Other Negative Entries Removed:Plains Commerce CO, HSBC CO, 2008 Judgment Santander Reposession


Positive Accounts:10/10: 0 | 07/12: 6 | Mortgage Closed 5/12, Macy's AMEX $13900, Citi/Home Depot $8500, Capital One Cash Rewards $3500, BOA $7500 Total Utilization: 3%. AAoA: 2yr, 9mth. INQS: 1 TU, 1 EQ, 3 EX
Valued Contributor

Re: USDA Guaranteed requires collections paid off?

Banks can have their own overlays to the guidelines so they may require you to pay off collections - I would ask for clarity 

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Brian B The Loan Professor
Mortgage Banker - offering FHA, VA, USDA , and Conventional mortgages in all 50 states -

If I do not respond to a follow up question please feel free to contact me directly
Regular Contributor

Re: USDA Guaranteed requires collections paid off?

I was told this week that there can be no open collections or judgments AFTER closing.  Sounded rather backwards to me.