Can Authorized User Accounts impact your USDA loan approval?
Welcome back everyone, Sean Stephens here again with Metroplex Mortgage Services and another USDA Loan Pro video quick tip.
Is an authorized user report on your credit affecting your USDA loan approval?
While credit scores are important to opening potential program options, the entire credit profile must be taken into consideration for USDA loan approval. In today’s video we will pinpoint a specific part of USDA loan eligibility and review how Authorized User accounts can impact the eligibility process and your loan approval. Before we get started, don’t forget to take advantage of our free USDA 2nd opinion service. This is great for both pre-qualifications and existing transactions who are looking for an expert 2nd opinion.
How can Authorized User Accounts affect USDA qualifying?
A Credit Card Authorized User is “A person who has permission to use and/or carry another person’s credit card, but isn’t legally responsible for paying the bill.” – (Investopedia) An example of an Authorized User could be a dependent that is listed on the account of a parent. They are able to use that account, but are not legally liable for any balance owed. USDA Loans have specific guidelines with regards to authorized user accounts, the overall goal being to obtain an accurate reflection of the applicant’s credit history. In cases where an applicant has authorized user account(s) listed on their credit report, the following will not require a manual downgrade:
- Another borrower on the application owns the account in question
- Owner of the trade line is the applicant’s spouse
- Evidence the applicant has been making payments on the account for the last 12 months
Remember, when receiving an Accept response through the GUS underwriting system it allows for streamlined processing with Automated Underwriting Guidelines. However, if any of these are not able to be met, then the loan file will be downgraded and require the need to process under USDA manual underwriting guidelines which is a more intensive review of the qualifying process. If you have a USDA loan in progress and are experiencing an issue due to an authorized user account, contact my team today so we can review and determine what options are available to secure your USDA loan approval. Remember, not all lenders have experience with processing and closing USDA loans. I see this each and every day on the 2nd opinions that come across my desk. As an approved USDA lender, we are known for our program expertise and have specific systems in place to process USDA loans from pre-qualification to closing.
800-806-9836 Ext. 280 SeanS@MPLX.org
Just call or email if you have any USDA qualifying questions, want to discuss a new scenario, or would just like to take advantage of our free 2nd opinion service which is great for those existing transactions I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!
