VanDyk Mortgage Introduces “No Score” Government Loans
At VanDyk Mortgage, we understand that every client may not have enough credit to create a credit score. To help borrowers in this situation, we are pleased to offer FHA, VA and USDA (Rural Development) financing for single family purchases to those who lack traditional credit references, but have credit verified through alternative sources.
For these applicants, a non-traditional credit report (NTMCR) may be developed. A NTMCR may not be used to offset derogatory references. These loans are manually underwritten, so overall evaluation of the credit file will be performed reviewing for layering of risk along with the additional documentation required for a manual underwrite.
Borrowers living rent free are not eligible. Housing/rental history can show no late payments in the last 12 months. A minimum of three trade lines, including rent, covering the most recent 12 months is required. The alternative trade line may be open, closed and/or paid in full. It must have at least 12 months of repayment history which is within the last 24 months.
Acceptable Credit References Include:
- Telephone service
- Utility company references
– if not included in the rental housing payment other acceptable references include:
- Television service
- Internet Service
If the borrower does not have accounts with the above creditors to meet the three references then the below can be used:
- Insurance payments (excluding premiums paid through payroll deduction) that are paid monthly. If paid other than monthly, documentation to meet a full 12 payment consecutive history is required.
- Payments to child care providers (if made to a business providing such a service)
- Payments to local stores (department, furniture, appliance & specialty stores)
- Payments for the uninsured portions of medical bills
- Automobile leases
Please note that VanDyk Mortgage does not manually underwrite Conventional Loans and all Conventional Loans require that every borrower have at least one score.