How To Get A Zero Down USDA Loan Even If Your Spouse Has Bad Credit

More people would be looking at buying a home in Arizona with the Zero Down Payment USDA Loan if they were not held back by their spouses bad credit.  There are lots of reasons why one spouse may have pretty decent credit and the other may have some bad credit dings; especially in our current economy.

These are called Spouse Only Loans and the USDA Loan does allow them.  It looks ONLY at the credit report history of the borrowing spouse and does NOT even look at the credit history for the non-purchasing spouse.  So if YOUR credit qualifies and your spouse has a questionable credit report, you have the option of not including your spouse on the loan.

USDA Administrative Notice 4543 specifically states that the Non-purchasing spouses credit is NOT considered a reason to deny a USDA Loan application.

However Arizona is a community property state, so you must disclose your spouse’s community property debt obligations on the application and you will need to qualify with those debt payments.

Here is how it works

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