USDA Loan Case Study: Overcoming Bankruptcy

Bankruptcy was Not an Obstacle for One USDA Home Loan Applicant

Being in the mortgage industry during this difficult economic time has taught me to constantly think outside the box when it comes to prospective USDA home Loan buyers and their unique credit situations. I pride myself on the step by step help I offer my clients that may need a little “credit boost”.

My client, Mr. “X” is a perfect example of how I stand by my clients and help them throughout the entire USDA Home Loan approval process, regardless of how long that may take. Mr. “X” had a chapter 7 bankruptcy that was discharged only 24 months before we started working through his USDA Loan application. He also had a foreclosure included in that bankruptcy due to an Adjustable Rate Mortgage on his prior home. He did have a stable job and had started to rebuild his credit – which is why I felt he was a credible borrower and worth fighting for.

When I first pulled his credit it was slightly lower than we could work with at a 620, due to his Chapter 7 Bankruptcy only being discharged 24 months prior. We needed his score to be 640. I thoroughly reviewed his credit and found a few areas we could focus on to get his score up quickly. Mr. “X” was waiting on a tax refund and he used that tax refund to pay down two credit cards so that we could do a rapid re-score on his credit. After the re-score, his score jumped up to 650, which allowed me to submit his rural development loan for approval. The re-score process took almost 4 weeks as we had to wait for the taxes to come in so he could pay his accounts down. I stayed in contact with Mr. “X” to make sure we were still on the right track.

His USDA Home Loan was approved and we closed two weeks later. He got a low rate and did not need any money at closing. Mr. “X” thought that the USDA Loan Agency and I were miracle workers after he received the keys to his new home just a short 24 months after his Bankruptcy was discharged.

My goal with every potential USDA Loans client is to review their situation and find a solution no matter how long it may take to implement. I have clients who stay in contact with me for nine months or more in order to get them to a point where they can be approved for one of these low interest rate USDA home loans.

As evidenced by the example above, you should never assume you will not qualify for a USDA Home Loan. The USDA Loan Agency is here to do whatever it takes to get you approved. Call us today at 1-866-854-4242 or fill out the USDA Loan application to get started.

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