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USDA loan with a few late payments

Hi, I'm hoping someone here can help me out.My wife and I are currently renting a home and have an agreement coming due this month, that we would buy the house at the current principle balance of $165,000. The house across the street is identical and sold last month for $210,000 which puts us in an equity position if we can qualify, however when we went to start the process a few months ago we found multiple credit problems. Our residence is in Texas.We have been working diligently to get them corrected, and most all derogatory items have been removed (they were from an identity theft my wife incurred) with one exception, a charge off from a utility company it looks like for approximately $200. We've been monitoring our credit file with identityiq and currently her scores are 620 experian, 660 equifax, and 620 TransUnion. There's one major problem, In September and December of 2015 we were 30 days late on 2 payments, they were small credit card payments that we just missed when paying the bills, and that's the only honest explanation I can offer. Then there is our bank card which went up to 90 days late from November 2015 to January 2016. There is a justifiable reason for this, our bank changed all accounts in October and split how we can see them based on who's name they are in. For example, I can see my bank credit card on my login, but can no longer see hers, and can't make the payment. We were unaware that her card was going unpaid this whole time because as the bill payer, I was not able to see that it even had a balance (we usually keep them at $0). As soon as we were made aware of the problem, we paid it off and all her cards have a $0 balance currently. I'm not trying to make an excuse for any of these issues, but only trying to be 100% transparent from the start.I just need to know if anyone knows of a way to get approved for a mortgage so that we don't have to move, and lose our opportunity on this house. I'm open to suggestions on loan types, we do not qualify for VA. by dave263 from San Antonio, Texas. Apr 12th 2016 Reply


Lorne Harvey (lorneharvey)
#81 ranked lender in Washington - 419 contributions

USDA does accept 620-639 credit scores. The utility collection may need to be paid in full. Sounds like this is possible. I would recommend that you find a good mortgage loan originator and give it a try.

Apr 12th 2016
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Thank you for the response Lorneha, do you feel they would ignore the late payments?

Apr 12th 2016
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,041 contributions

It's nearly impossible to directly answer your question based on the limited info you provided... Although USDA will lend down to the 620 range, they also analyze the entire loan profile when determining one's eligibility.. and without seeing the whole picture, it's difficult to say.. USDA is zero down.. but you will still have closing costs.. having recently delinquent payments is a bad thing.. so even though guidelines allow for your scores, the underwriter might have a problem with recent late payments on relatively minor payments.. also keep in mind that USDA loans are underwritten twice, making this scenario even more difficult to get through.. FHA requires 3.5% down.. and might be a better fit for your scenario.. but the only way to know for sure would be to pick up the phone and contact a LOCAL mortgage broker and apply with them. Once they see your complete loan profile, they will be better equipped to advise you properly. Also, by applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with many lenders with each one offering a different type of lending program. This is unlike the local bank which typically only has a few lending programs. The more lenders, the more lending options, and the more likely your scenario will be accepted.. Plus, the broker is experienced in seeking out the best loan terms for your particular scenario, and he has lower overhead which typically results in lower rates and fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Apr 12th 2016
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Thanks William, I will be looking into reputable brokers in my area to see what I come up with. I truly appreciate your input.

Apr 12th 2016
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