USDA DIRECT LOAN QUESTION

[gracie8676]

Hi everyone I'm new here and I just sent out my application to USDA for the direct loan fingers crossed 🤞 I'm hoping to get approved. I've done some research on these forums which have been a lifesaver so I paid for the all 3 scores and my mortgage scores right now are 719-Eq 652 TU 638 Exp is this true that they'll only look at the middle score? I'm freaking out a little because yes my middle score is 652 but the Experian is 2 points below 640 do they always take the middle score, just nervous about that one. Also if someone could clarify what it means when your middle score is at 640 what is this automatic approval do they not do an extensive credit check or something if it's above 640? Thanks guys. I'm really hoping all this goes well for my family and I and we will finally get to be home owners! Thanks in advance for everyone who answers my question.

[txwallflower]

Welcome gracie8676.

To answer your first question is the middle mortgage score, in your case 652, the score used to qualify you for a mortage?  Yes, no matter what kind of mortgage you are applyiing for: FHA, USDA, Conventional, etc. lenders use the middle score of the applicant.  You did not mention if you are married.  If married and both incomes will be used to qualify for the mortage, then the lowest of the 2 middle scores are used. For example, your score is 652, and if married and your spouse middle score is 630, then 630 would be used to qualify you both for the mortgage.

As to the 640 score, since you are applying for a USDA Direct Loan, your must have a middle mortgage score of at least 640. The USDA doesn't have a fixed credit score requirement, but most lenders offering USDA-guaranteed mortgages require a score of at least 640, and 640 is the minimum credit score you'll need to qualify for automatic approval through the USDA's automated loan underwriting system.

It is not a guarantee that you will be approved for a mortage, but if you don't have at least a 640, lenders who offer mortages for this program most likely won't let you even apply.

[gracie8676]

Thanks for welcoming me and answering my question. I've learned a little on from these forums. So I guess I'm in a little bit of a pickle with this usda direct loan then. I am not married but my partner is on SSI we've been together for a very long time have 3 kids together and he has been on SSI since he was 16 years old but he has absolutely no score at all it's showing insufficient due to lack of any credit history at all because he has never had any lines of credit the only thing he pays on every month is his car insurance and we share food expenses and any other things needed for the household. He gets about $841 a month in SSI. I claim him on my taxes every year, he meets the IRS definition of a qualifying relative because I provide more than half of his support. I'm wondering if they'd let me just put him as adult household member. I don't know what to do I'm hoping they'll work with me and figure out a way then.

[ldkcivilservant]

Not really sure what you're saying here - he doesn't have to be on the mortgage, unless you need his income to qualify. Or are you saying that with his income you will be over the USDA Direct program limit? USDA requires that income of all household members be combined for the purpose of income qualification.

[gracie8676]

He wants to be on the mortgage with me and it will help boost our income up getting us a better loan amount and we will still be way under the program limit for the area we are looking to move to. Let's say if he wasn't the co borrower and just a adult household member would they still use his SSI  income for our household?

[ldkcivilservant]

Yes. Income from EVERY person in the household is used for a USDA loan. Even if your children were employed, that counts too, regardless of their status vis a vie being on the loan.