USDA Loans With Lower Credit Scores
USDA financing can still work when your score is lower. At least one program accepts scores above 580, and a Refer from USDA’s automated system can still be underwritten by hand.
What you need to qualify
Each item below is a requirement of USDA or at least one USDA program we offer.
- On at least one program, a credit score above 580.
- On a file underwritten by hand, debt ratios within 29% and 41%, or higher with a 680 score and a compensating factor.
- For a purchase, a home in an area USDA lists as eligible.
- Adjusted household income within the USDA income limits.
- A home you will live in as your primary residence.
- No access to traditional conventional financing, on at least one program.
Scores above 580 can work
Income limits apply
Refer is not a decline
No score can work
Sellers can help
Ratios can stretch at 680
Can You Get A USDA Loan With A Lower Credit Score
Yes. At least one USDA program accepts scores above 580, and a Refer can still be underwritten by hand.
At least one USDA program we offer accepts credit scores above 580, and loans run through GUS, USDA’s automated underwriting system. If GUS returns a Refer, the loan can still be manually underwritten instead of being declined. Manual files follow the debt ratio and credit rules below.
On a manual file, at least one program holds debt ratios to 29% and 41%. If your credit score is 680 or higher and you document one compensating factor, such as three months of reserves after closing or two years with your current employer (not for self-employed borrowers), they can go to 32% and 44%. Also looking at FHA? See our low credit score FHA page.
If you have no credit score or no traditional credit history, at least one program lets you show your willingness to pay through alternate sources, such as rent or housing payments. Without a rent history, three tradelines are required. Waiting periods after a bankruptcy or foreclosure follow USDA and GUS rules.
Why choose Saxton for a USDA loan with lower credit
For buyers of homes in USDA rural areas whose credit score is lower than they would like.
Scores Above 580 Can Work
At least one USDA program we offer accepts credit scores above 580.
Income Limits Apply
Adjusted household income must meet USDA’s income limits. It is figured from household members’ income minus eligible deductions.
Refer Is Not A Decline
If GUS returns a Refer, at least one USDA program allows the file to be underwritten by hand instead of declined.
No Score Can Work
Without a validated credit score, you can document your willingness to pay through alternate sources, such as rent. Without a rent history, three tradelines are required.
Sellers Can Help
On a purchase, at least one USDA program lets interested parties pay up to 6% of the purchase price toward closing costs.
Ratios Can Stretch At 680
On a manual file, with a credit score of 680 or higher and one documented compensating factor, debt ratios can go from 29% and 41% to 32% and 44%.
Hear From Homeowners Like You
Frequently Asked Questions
Straight answers about USDA loans with a lower credit score.
At least one USDA program we offer accepts scores above 580. If USDA’s automated system returns a Refer, the file can still be underwritten by hand.
At least one program manually underwrites the loan under USDA guidelines instead of declining it.
Yes, on at least one program. You can document your willingness to pay through alternate sources, such as rent or housing payments.
At least one program holds them to 29% and 41%. With a credit score of 680 or higher and a compensating factor, they can go to 32% and 44%.
On a purchase, at least one USDA program allows interested parties to pay up to 6% of the purchase price toward closing costs.
It can. On at least one program, a rent or mortgage history with no more than one 30-day late in the last 12 months can support a compensating factor, when the new housing payment is close to what you pay now.
No. At least one program says a borrower is not eligible for USDA if they can secure traditional conventional financing.
Find out what you qualify for
Tell us your credit score and where you want to buy, and we will show you the USDA options that fit.
Get Pre-QualifiedLoan amounts, rates, terms, and eligibility are subject to credit approval, asset and income verification, appraisal, and program guidelines. Draw requirements and variable rate terms apply. Program availability varies by state. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.