Question

Borrowers with a nontraditional credit history may be eligible for maximum financing, but they must still meet HUD guidelines. What are the HUD guidelines for borrowers with nontraditional credit history, and how do they affect the loan approval process?

Answer 1

HUD provides guidelines for borrowers with nontraditional credit histories to be eligible for maximum financing. These guidelines include having alternative credit references and a clean history of renting and maintaining other obligations.

Step-by-step explanation:

The Department of Housing and Urban Development (HUD) provides guidelines for borrowers with nontraditional credit histories who are seeking maximum financing for home loans.

These guidelines are designed to ensure that borrowers meet certain criteria to be eligible for the loan.

One of the main requirements is that the borrower must have at least three alternative credit references, such as rental payments, utility bill payments, or insurance payments. These references help demonstrate the borrower's ability to make timely payments.

Additionally, the borrower must have a valid Social Security number and a clean history of renting and maintaining other obligations. The borrower may also need to provide additional documentation to support their creditworthiness.