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:
Adverse credit waivers may be granted for mitigating factors to establish the applicant’s intent to good credit. Lenders must document these circumstances which were beyond the borrower’s control and have been removed:
Circumstances for adverse credit were temporary in nature, beyond the applicant’s control and have been removed. Examples: increased expenses due to illness and/or medical expenses, injury, death, etc.
Tri-merge credit reports are required and must be no more than 90 days old at the time the Conditional Commitment is issued
Applicants must not be delinquent on any debts owed to the Federal Government
CAIVRs must be checked and documented in the loan submission package.
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