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My wife is trying to get approved for a USDA loan for our first house and were just denied pre-approval.
I filed chapter 7 less than 2 years ago, before I met my wife, and we knew it would prevent me from being on the loan.
Everything we have read suggested that if she was the only one on the loan, then my bankruptcy shouldnt make a difference, but the mortgage company just told her that is the reason we were denied.
Her credit score is 730, she has very little debt, and a stable job/work history.
Has anyone been in the same situation?
EDIT: We live in Missouri.
@Anonymous wrote:My wife is trying to get approved for a USDA loan for our first house and were just denied pre-approval.
I filed chapter 7 less than 2 years ago, before I met my wife, and we knew it would prevent me from being on the loan.
Everything we have read suggested that if she was the only one on the loan, then my bankruptcy shouldnt make a difference, but the mortgage company just told her that is the reason we were denied.
Her credit score is 730, she has very little debt, and a stable job/work history.Has anyone been in the same situation?
EDIT: We live in Missouri.
How did the lender find out that you filed a chapter 7?
You need a new lender.
Feel free to PM for help or info.
I think you have to wait 3 years with USDA.
If she is getting the loan by herself then your credit should not matter. That doesn't sound right. Maybe you should talk to the loan officer again.
I can't find much on the USDA loans but I've read that FHA will consider after 2 years after filing. However, you should be able to get a loan under just one person and the chapter 7 shouldn't affect the others credit or loan factors.
Your only problem was you went to the wrong lender.
@homeloanexpert wrote:Your only problem was you went to the wrong lender.
Agree with you on this. Only in communial states would a spouse not on the loans credit be a problem. We live in Arkansas and of course my husband isn't on the loan because of his credit plus what's on it. His income was included but not his credit.
The USDA RDL is a quirky loan. They will actually factor in all the household income, including a minor's income (even though that child is not going on the loan). Years ago I got careless on a file and didn't ask if the borrower's son worked. He in fact was a pizza deliver guy and had only been on the job for 3 months. It didn't matter. That kid's income was factored in the mix.
USDA's BK requirements are 3 years, but I'd talk to a different lender or LO.