topic USDA Direct Loan Question in Mortgage Loans

USDA Direct Loan Question

DeSorbo21 — Fri, 17 Jan 2025 18:56:23 GMT

Hey everyone I'm a first time homebuyer and am looking to buy with the direct loan. I spoke with my local office and they advised me to apply asap because of low funding etc so my question is Would they deny me for any open or closed disputes? I have two disputes open with TU and EQ because there is one super small collection reported with them but have been removed with the other bureaus. Should I just close the disputes or let them continue the dispute process? Also do they consider one small collection into DTI if I decide to leave them on? Also my middle score is over 640 would this be ignored and streamlined? I'm worried about letting the disputes ride out possibly 30 days and don't get in quick enough but I also don't want the collections to ruin my chances or increase my DTI too much. Thank you for any advice in advance.

Re: USDA Direct Loan Question

stinastina — Tue, 11 Feb 2025 17:21:10 GMT

The disputes will probably be completed by the time the USDA pulls your scores. Nothing they do is fast. Did they tell you how long their backlog is ?

I honestly think this program is in jeopardy due to the new administration.

Re: USDA Direct Loan Question

DeSorboE21 — Tue, 11 Feb 2025 17:27:15 GMT

They said they barely have applications right now. My disputes just finished and I was able to get the collections off. But now my mortgage score dropped to 635 due to an old account closing. Ugghhh so now I'm back at square one trying to figure out how to bring that back up 5 points. And yeah I had that thought I'm hoping and praying not. 🤞🏾

Re: USDA Direct Loan Question

stinastina — Tue, 11 Feb 2025 17:34:02 GMT

Isn't the minimum 620 ?

Re: USDA Direct Loan Question

DeSorboE21 — Tue, 11 Feb 2025 17:36:29 GMT

Technically you can have any score supposedly but for the Direct loan they want 640 for streamlined credit review which I prefer. And for usda through lenders it's 620

Re: USDA Direct Loan Question

stinastina — Tue, 11 Feb 2025 17:43:22 GMT

The longer you wait, the less the chances for success. If you have less than 640, you just need to provide proof of rental history. Read up on what's required or try to find a way to raise your score quickly. Like pay down a card that will report immediately. I would not wait one second trying to get my application in. Then once you get your COE, you have to house hunt and find a seller who doesn't mind waiting to close.

Re: USDA Direct Loan Question

DeSorboE21 — Tue, 11 Feb 2025 17:44:42 GMT

Will do thanks!

Re: USDA Direct Loan Question

stinastina — Tue, 11 Feb 2025 18:26:12 GMT

Good luck ! Let us know how it goes and if you have any other questions.

Re: USDA Direct Loan Question

8shanny8 — Sat, 22 Mar 2025 11:10:25 GMT

I may be too late but thus is good info for anyone to get their score up a lot and quickly in most cases if you make more than one pmt per month. I use my card for the rewards cash back so I make multiple pmts per month and my score went up fifty points I'm now over 700. It went up just from making two pmts but now I'm making more basically using my card and paying as soon as it posts