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USDA Underwriting Guidelines

Reviewed by: David Naimey

Approved by: Chad Turner

When trying to obtain a USDA home loan an underwriter has many guidelines that they look at when qualifying a borrower.  On top of having a middle credit score of 640 or higher the underwriter’s want the applicants to have open and active trade lines that have a 12 month or greater payment history.  This is required to demonstrate to the lender that you are able to properly manage your budget and pay your bills on time.  The minimum requirement is four accounts.  Below I have listed some trade line options.


    • (12) Months rental verification.   ( This is a big one as the underwriter will give us credit for *TWO* Tradelines on rent)

    • Any open & active account that shows on your credit report (Credit Cards, Car & Other instalment loans,  Student Loans, Etc.)

    • Alternative Trade lines are accounts that have a reoccurring bill that is not reporting to the credit agencies (Utility bills, car insurance,  gym membership, Netflix account Etc.)

I’ll stress again that we need (4) accounts or more, to have USDA loans close successfully. The alternative trade line accounts need to be in the applicants name and or provide definitive documentation for the underwriter that shows the applicant is the one that has been and currently is paying the bill each month in full and on time.   One other side note is that  an authorized user accounts will not be counted as a valid trade line unless the primary card holder is the applicants spouse or he/she is the one that pays the account in full each month.


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