USDA Loans - Verification of Rent

Date: July 15, 2011

One of the most important aspects of qualifying a new homeowner for a USDA Loan is determining if there is a history of making a rental housing payment. This helps the Underwriter evaluating the loan to determine the likelihood that the new homeowner will be able to make their mortgage payment, based on a history of making an on-going monthly housing payment.

The USDA Loan program establishes that borrower’s with a minimum 640 middle credit score are exempt from having to document their rent history. However, the Underwriter at their discretion can request a Verification of Rent History at any time even if the borrower’s middle credit score is greater than 640. Borrowers with a middle credit score between 620 and 639 or no credit scores will be required to document a rent history. Currently, borrowers with middle credit scores that are less than 620 are ineligible for USDA Financing based guidelines from end investors.

In order to document a rent history the borrower must be provide one of the following:

If renting from a large apartment complex a Verification of Rent form can be completed by the Apartment Management. The Apartment Management must state on the form that there aren't any late payments, in excess of 30 days, within the last 12 months.
If renting from a private landlord 12 months of cancelled checks, copies of money orders, or electronic wire transfers. The monthly payment amount should be consistent from month-to-month.

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