USDA Relaxes Guidelines for No Money Down Buyers!

USDA Now Only Requires 2 Credit References!

Effective immediately, USDA has lowered the minimum credit requirement from 3 to 2 trade lines reporting 12 months

USDA Guaranteed Rural Development loans require no money down, the rates are fixed for 30 years, have low costs, USDA eligibility mapand are available to a large portion of today’s buyers.  Many people have the misconceptions that Rural Development loans are only for farm land and/or low income families but this couldn’t be further from the truth.  Actually most of the U.S. is eligible as shown by this map and includes areas such as all of Brunswick County including Leland, Southport, and all of its beaches.  See how to search for USDA eligible areas here.  Additionally most county household income limits are as follows:  1 – 4 household members = $75,650 and 5 + family members = $99,850.  There are many areas above these limits though such as Raleigh, Cary, Durham, Chapel Hill, Charlotte, Gastonia, Camden County, Dare County, Rock Hill, and Beaufort County.  Have you considered a No money down USDA loan?  Call Team Move!

Minimum Credit Requirements for USDA Loans Now Includes:

  • Minimum number of trade lines to validate an applicant’s score is only two instead of 3
  • Eligible trade lines include revolving (credit cards, lines of credit), installment loans (car loans, furniture loans, and other types of term loans), & mortgages
  • Qualifying trade lines must be open at least 12 months
  • Nontraditional or alternative credit is allowed to supplement the credit report to meet the requirement **
  • At least one applicant whose income and assets are used for qualifying must have a valid credit score

** Alternative credit includes items such as car insurance, life insurance, utilities, cell phone, gym membership, small store accounts not reporting on credit, school tuition, and even a pattern of savings deposits.

Many thought it was amazing that we closed loans with only 1 credit reference on credit and two alternative credit references, but now we can do even better for buyers!!  Check out these USDA limited credit success stories!

Additional USDA Resources:

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Written By: Russell Smith

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