I went USDA Direct and right before I applied I had a collection show up on my report.  It was also under $150.  I could have disputed it because the CA was illegally reporting but my scores were all over 660.  So, I decided to ride it out and see what happened.  It was never an issue because of my scores.  I applied at the end of February and closed mid-July.  By the way I just had the collection removed off of my reports last week. 

Your local field office where you applied should be able to tell you if it is a problem though.  I would check with them to make sure.  I have noticed that different field offices interpret things in different ways.