100% Financing USDA Loans
100% financing USDA loans – no down payment required. Household income guidelines are required along with the home to be purchased must be located in an eligible rural area.
- GUS (Guaranteed Underwriting System) is used for purchase transactions to get eligibility recommendations for a USDA loan.
- Credit score down to 550.
Credit History For USDA Loans
- Credit score down to 550, but generally not approved unless above 580 without strong documentation supporting extenuating circumstances of adverse credit on credit report.
Seasoning on derogatory events:
- Bankruptcy needs to be 3 years out from discharge date.
- Foreclosure needs to be 3 years out from foreclosure date.
- Short sale needs to be 3 years out from short sale date.
Manual Underwriting in a Chapter 13 Bankruptcy
Manual underwriting is possible for USDA loans, but not all lenders are willing to manually underwrite because of overlays. Currently in Chapter 13 bankruptcy requires:
- 12 month satisfactory pay history and court permission.
Without extenuating circumstances, the Chapter 13 bankruptcy must be discharged for 12 months minimum.
Eligible Properties for a USDA Loan:
- 1 Unit, warrantable condo/PUD/townhouse (agency approved) and primary residence only.
- Newly constructed manufactured home permanently affixed to the foundation are eligible; manufactured homes recently completed within the previous 12 months are considered new construction.
United States Department of Agriculture Site to Determine Eligibility for Loan Programs
The loan program requires household income to meet income limits and the purchased home must be located in an eligible rural area.