ALTERNANTIVE CREDIT CONVENTIONAL LOAN

Under new guidelines, eligible borrowers no longer need a minimum credit score to qualify for certain conventional loans

Payments such as rent, utilities, cell phone bills, insurance, or other verified monthly obligations can be used to demonstrate responsible financial habits.

This program is perfect for borrowers who pay everything on time but lack traditional credit lines (credit cards, auto loans, etc.)

Borrowers still receive the benefits of conventional loans, competitive rates, fixed terms, and the ability to remove PMI later.

Qualified borrowers can still access down payments starting at 3% – 5%, depending on lender guidelines and compensating factors.

Instead of a credit score, borrowers must provide nontraditional credit references, such as:

• Rent payment history
• Utility bills
• Phone/internet bills
• Insurance payments
• Other recurring monthly obligations

Most lenders require at least two verified alternative credit sources.

Loans with no credit score generally must be:

• A 1-unit primary residence
• A purchase or limited cash-out refinance transaction.

DTI limits still apply and must show the borrower can comfortably afford the monthly mortgage. Many lenders allow up to 43%–45%, depending on total compensating factors.