USDA + 605 + Discharged 4/09

[Confused33]

Hello again everyone!

When I filed CH7 in 12/08 my score was in the 700s and I was not late on anything. I wiped everything out, didn't reaffirm on the house but continued to pay it. I later leased the house out and it is providing a bit of income. I refinanced the car that we kept in my wife's name alone because we had huge equity in it.

So ultimately I had a clean slate as of 4/2009. Since I have obtained two credit cards and have made a couple of purchases and paid them off. One has a $2000 limit the other is $1000. Neither of them are secured lines of credit.

All that being said, I have a 605 Equifax score now. My wife has both cars financed in her name but nothing else. Had a problem with a student loan which is now paid off but her score is a 559.

We are looking at a new house that qualifies for USDA loans.

With that being said and not having any money to throw at the loan do you think we have a case or not?

[tigergem]

You could try and see if they have the information published. This is what the USDA web site says:

The regulations that guide HCFP programs are published in Chapter 7 of the Code of Federal Regulations (CFR). Most public libraries have copies of CFRs. Copies of our regulations, instructions, and handbooks can also be viewed in any Rural Development office, or can be downloaded and viewed online at http://www.rurdev.usda.gov/regs/

If the regulation you want is not available online, you can order a copy at any Rural Development office, or contact Rural Development, FC-313, 1520 Market Street, St. Louis, MO 63103.

Good luck! I hope it works out for you!

[DebtStinks]

Here is what I found at http://www.rurdev.usda.gov/ca/pdf%20...G%20GUIDEL.pdf

Credit History:

Applicants must have a credit history that indicates a reasonable ability and willingness to meet obligations as they become due. A credit history reflecting any or all of the following is considered unacceptable credit history:

More than one 30-day late within the past 12 months.

Bankruptcy or foreclosure discharged less than 36 months

Outstanding judgments within the past 12 months

Two or more rent payments 30 days late within the past 3 years.

Outstanding collection accounts with no payment arrangements

Outstanding tax liens or delinquent federal debt with no payment arrangements

Accounts converted to collections in the past 12 months.

Mitigating Factors to Unacceptable Credit:

[Ugh07]

2 problems.

1. You cant own any other houses when applying for an FHA loan.
2. Your score is too low for the streamline credit process.

[Confused33]

Well...after talking to a lender they told me my actual score is a 628 and I need to wait about another 8-12 months to apply successfully. Also found out they are reporting the boat I surrendered in the BK as a $30K collection. The fact that I still have a 628 and I have a $30K collection is crazy to me. Credit scoring is such a racket.

[tigergem]

Yeah mine were all between 611 and 650 when I had a $28k collection, come to think of it. And one secured credit card that I was paying "properly".

[Ugh07]

unless you sell the other house you are still going to have a problem with USDA

[sofarsogood2]

He doesn't have to "sell" the other house, just stop paying and let the bank take it back. He didn't reaffirm it. He can no longer be held personally responsible for that debt.

[Ugh07]

1. With a USDA loan he can't own more than one property.

2. Once the bank "takes it back" it will be considered a foreclosure and the clock will start on that.