Number of Nontraditional Credit Sources Required
The number of nontraditional credit sources that must be documented for a borrower without a credit score differs depending on the underwriting method and loan product, as described in the table below:
| |
Number of Nontraditional Credit Sources Required |
| Underwriting Method |
Loans other than HomeReady Loans |
HomeReady Loans |
| Manually underwritten loans |
|
- Three sources for each borrower without a credit score
- If there is a borrower on the loan without a credit score who cannot document a nontraditional credit profile (because the borrower has no nontraditional credit sources), the transaction is still eligible, provided no more than 30% of the qualifying income for the mortgage loan comes from that borrower.
|
| Loans underwritten through DU |
- If no borrower has a credit score
- at least two sources for each borrower
|
- If the borrower(s) with a credit score contributes
- 50% or less of qualifying income, at least two sources for each borrower without a credit score.
- more than 50% of qualifying income, then no nontraditional credit history is required for the borrower(s) without a credit score.
|
For additional information, see B3-5.4-02, Number and Types of Nontraditional Credit Sources
