Manual Underwriting: At Least One Borrower Has No Credit Score
If one or more borrowers on the loan does not have a credit score and is relying on nontraditional credit to qualify and loan is being manually underwritten, the following requirements apply:
- The property must be a one-unit, principal residence.
- The transaction must be a purchase or limited cash-out refinance.
- The loan amount must meet the general loan limits—high-balance mortgage loans are not eligible.
- The maximum debt-to-income ratio is 36%.
- There is no minimum reserve requirement if at least one borrower can document a rental payment history as one source of nontraditional credit. Otherwise, a minimum of 12 months reserves is required. See B3-5.4-02, Number and Types of Nontraditional Credit Sources, for additional information.
- Non-occupant co-borrowers are permitted, provided the requirements described in B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers on the Subject Transaction, are met in addition to the eligibility requirements described above.
- A nontraditional credit history must be documented for each borrower without a credit score. See B3-5.4-03, Documentation and Assessment of a Nontraditional Credit History, for additional information.
For additional information, see B3-5.4-01, Eligibility Requirements for Loans with Nontraditional Credit.