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USDA RD loan underwriting with no verification of rent

My credit score is 629 (student loans came out of deferment and I wasn't aware, as soon as I realized I paid them current and have payed current since). No other lates. Ratios are great (no credit cards, car payments or anything else). Here is my issue. My wife and I live on the campus of her university. She pays for our apartment here out of her student loans (we live in family dorms, basically). I know due to my credit score they will as for verification of rent in underwriting. Will they deny me if I have no verification of rent?? I'm really worried about this. by hirmoe from 406, Delaware. May 16th 2014 Reply


Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,299 contributions

If you are doing a manual underwrite on a USDA loan, they do want to see a rental history. But, if you do not have a rental history, it is not a requirement to approve or deny a loan in and of itself. For USDA loans in MN, WI, and SD, visit www.JoeMetzler.com/usda

May 16th 2014
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,299 contributions

I think you are way over thinking this... and it isn't anywhere near the issue you believe it is. A letter of explanation should suffice in your case.

May 16th 2014
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So if they don't see a rental history, can other factors compensate? Our ratios are excellent, and my wife has income we are not using to qualify. I'm very concerned we won't pass underwriting. If the underwriter asks for rent verification what do I tell him or her?

May 16th 2014
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Kenneth Kopper (KenKopper)
#20 ranked lender in Maryland - 542 contributions

So your housing expense is covered by her tuition or is the housing expense paid by your wife out of her student loans. If it is absolutely required, a detailed letter of explanation and a transaction history from the university showing rent/housing payments made on your unit should work if paid directly by your wife. If paid out of tuition, I would think a letter of explanation and a tuition bill showing housing is included should satisfy the underwriter.

May 16th 2014
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She pays it by the semester using student loans. I'm not on the lease, so it will not show my name, which I'm concerned about.

May 16th 2014
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How much would it impact my file if I had them use "0" for my current rent, and just took the hit on payment shock?

May 16th 2014
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Lisa Holcomb (lholcomb@guildmortgage.net)
#7 ranked lender in Montana - 2 contributions

From my experience with RD in Montana-if you pay a property management company-we would get a written verification of rent. If you pay an individual-RD wants to see 12 months rent checks. This could be moot if the RD underwriting system does not ask for verification of rental history. You won't know if you get to slide on this issue until the loan or pre-qualifiction is run the GUS (RD's underwriting system).

May 16th 2014
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