No Credit Score FHA – No Score Fannie Mae Loan Options

Can someone with no credit score get a loan to buy a house? 

If I don’t have a credit score, am I stuck using a Non-QM loan? 

Finally, there is help for borrowers with no N/A credit scores. We also offer Manual UWs on FHA, VA, and USDA. Attached is information surrounding manual UW’s on FHA, VA, & USDA, along with how to use compensating factors to allow for higher DTI on FHA & VA. 

Northstar Funding offers No Credit Score options for borrowers going Conventional or FHA. If you go CONV, you must use Fannie Mae. Did you know that if borrower one has a score, but borrower two does not, we will price the loan based on the borrower with a credit score if it’s CONV? Grading credit like this is constructive in today’s rate environment. 

Fannie Mae – No Score

• *Must receive Approve Eligible through DU*
• Primary residence only, and ALL borrowers must occupy.
• Purchase or rate & term refinance
• MAX LTV is 90%
• DTI has to be under 40.00%
• Reserves per DU findings
• We accept documented non-traditional credit for each borrower without a score.
• If one borrower has a score but another does not, as long as the borrower with a score contributes 50% or more of the income, you do NOT need to establish non-traditional credit. 
• If one borrower has a score, but another borrower does not, we would need to document non-traditional credit IF the borrower with no score contributes more than 50% of qualifying income (2 non-traditional tradelines needed)
• Acceptable Non-Traditional Credit (12-month history):
  • Rental housing payments (or mortgage payments)—we have to get this if we’re developing non-traditional credit.
  • Utilities—gas, electric, water, telephone, TV, internet
  • Medical insurance coverage
  • Automobile insurance
  • Cell phone payments
  • School tuition or childcare
  • Renters Insurance

FHA – No Score

• These are MANUAL UW’S, no matter if you have AUS approval.
• No cash outs on these
• One-unit property only
• Max ratios are 31/43% (unless another borrower has a score)

Non-Traditional credit—must establish THREE credit references, including at least ONE of the following

• Rental housing payments
• Telephone service
• Utility company reference (gas, electric, water, cable, internet
• If we cannot develop three from the above options, we can use the following to complete three tradelines.
  • Insurance premiums (not payroll deducted)
  • Childcare
  • School Tuition
  • Retail credit cards
  • Medical bill payments not covered by insurance
  • 12-month history of savings evidenced by regular deposits resulting in an increased balance to that account that the borrower made quarterly, not payroll deducted, and caused no NSF 
  • Auto lease
  • Personal loan
• The qualifying ratios for borrowers with NO credit scores will be used only for borrowers occupying the property. If a non-occupant co-borrower exists, we cannot include their income. 
• Reserves: 1 month needed

If you have a potential loan that would fit this No Credit Score FHA or No Score Fannie Mae Loan program, please call us, and we can discuss the scenario to ensure it can be structured correctly. 

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Read more: Manual Underwrite with No Credit Scores- FHA and Fannie Mae