In North Carolina one of the best mortgage programs is the USDA Home Loan. These mortgage loans are fairly easy to qualify for, and the minimum credit score requirements for USDA Loans in NC are somewhat flexible.
Have you been told your credit scores are too low to buy a house? Remember - credit can be fixed. It's more or less like loosing weight. Once we peak at your credit, we can figure out what you need to do to get to that ideal number! We can usually help someone get there in a matter of months!
USDA Home Loans are reserved for those who want to live in a more rural setting, and are not available in most NC Metropolitan areas.
USDA Home Loans have no down payment requirements. The monthly USDA PMI rate is only .4%, and does not go up if you have lower credit scores.
There are two credit score thresholds for a USDA Home Loan NC approval. The Automated Underwriting system (GUS) is good at approving borrowers who have at least 2 our of 3 credit score that are 640 or higher.
For buyers with credit scores in the 620 – 639 range, GUS will not issue an approval, and those loans require Manual Underwriting.
That basically means that an Underwriter must have strong compensating factors to approve your loan. Compensating factors could include a lower debt ratio, in order to “justify” approving your loan outside of the GUS system. Not all banks and mortgage brokers work with folks who do not meet the GUS minimum credit score requirements for USDA Loans (below 640) however, our bank does :)
All USDA Home Loans (no matter what the credit score) must go to the USDA Office for approval. This typically means the USDA Home loan has a longer approval process. As of today - it's taking the NC USDA Home Loan office almost a month to review a file.
The waiting period to get a USDA Home Loan after a Bankruptcy or Foreclosure is 36 months from the date of the transfer, discharge. This is an important distinction that you should do some research on. You might have Court papers signed on Septemeber 1st - but the Bank who took the house back may not have filed their paperwork until December 1st. You will not be able to close your USDA Home Loan (with this example) until after the December 1st date.
If you have more questions about the minimum credit score requirements for USDA Loans, please call Steve and Eleanor Thorne at 919 694 5058. We've done many of these loans - and we can generally figure out how to make the credit score part of qualifying for a USDA Home Loan in NC work.
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