Help understanding approval odds

[ZiggyMRA]

I have been working to clean up my credit after a divorce (June 2021).  I have brought my credit utilization down to under 10% (waiting for accounts to report).  Once my scores update, they will be around 700 across the 3 burearus (not mortgage specific scores).  I meet the income guidelines for a USDA Loan, and the area I will be purchasing in qualifies for a USDA Loan.  I also qualify as a first time home buyer given that the marital home was in my ex's name (and pre-marital property).  My concern is that I carried high utilization on my cards when married.  In the 3 months since then, those balances have been steadily dropping to zero.  I have a mix of credit cards, personal loan, auto loan, and a very small student loan - no missed payments but (2) 30 day lates from Nov 2017.

I have about $5,000 in savings for a down payment right now, but am hoping to qualify for a USDA loan so that I can keep that as an emergency fund.  I started a new job in April (same industry) with no employment gaps in the last 3 years.  Can any of the loan experts out there give me an idea of what my approval odds may be?  I'm looking for something modest (~$150K) that will keep my DTI in the low 30% range.  Thanks for reading and for any info you can help with!

[VALoanMaster]

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@ZiggyMRA wrote:

I have been working to clean up my credit after a divorce (June 2021).  I have brought my credit utilization down to under 10% (waiting for accounts to report).  Once my scores update, they will be around 700 across the 3 burearus (not mortgage specific scores).  I meet the income guidelines for a USDA Loan, and the area I will be purchasing in qualifies for a USDA Loan.  I also qualify as a first time home buyer given that the marital home was in my ex's name (and pre-marital property).  My concern is that I carried high utilization on my cards when married.  In the 3 months since then, those balances have been steadily dropping to zero.  I have a mix of credit cards, personal loan, auto loan, and a very small student loan - no missed payments but (2) 30 day lates from Nov 2017.

I have about $5,000 in savings for a down payment right now, but am hoping to qualify for a USDA loan so that I can keep that as an emergency fund.  I started a new job in April (same industry) with no employment gaps in the last 3 years.  Can any of the loan experts out there give me an idea of what my approval odds may be?  I'm looking for something modest (~$150K) that will keep my DTI in the low 30% range.  Thanks for reading and for any info you can help with!

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Hi @ZiggyMRA,

As long as your middle mortgage score is at least 640 or better, you should be fine.

USDA has tightened up their Automated Underwriting System (AUS) over the last several years to the point where it will not approve anything under 640.

If you're under a 640 you will likley have to go through as a manual underwrite.