Manual Underwriting Mortgage Loans

Get a Mortgage When You Don't Fit the Standard Credit Model

Not everyone has a traditional credit score and that should not prevent homeownership. Manual underwriting provides a way to secure a mortgage for borrowers who cannot be evaluated by standard credit scoring models. At Alpine Mortgage we have experience helping borrowers with no credit score or thin credit files qualify for home financing.

What is Manual Underwriting?

In standard mortgage processing, automated underwriting systems evaluate applications using algorithms that rely heavily on credit scores. If you do not have a score or your score does not reflect your true financial responsibility, these systems may reject your application automatically.

Manual underwriting is al alternative to automated systems. Instead, a human underwriter reviews your complete financial picture including payment history for accounts not reported to credit bureaus. This hands-on review allows qualified borrowers who would otherwise be rejected to receive fair consideration.

Who Benefits from Manual Underwriting?

Manual underwriting is for borrowers whose credit files do not tell their full financial story:

No Credit Score
Some borrowers have insufficient credit history to generate a FICO score because they have not used traditional credit products.

Thin Credit Files
Borrowers with only one or two credit accounts may have scores that do not accurately reflect their financial responsibility. A single late payment on a thin file can cause disproportionate score damage.

Debt Free Borrowers
Borrowers who have chosen to live without credit cards, car loans, or other debt often have no credit score despite being financially stable. Manual underwriting recognizes that avoiding debt is not the same as being unable to manage it.

Bankruptcy
After bankruptcy, credit files can be thin as discharged accounts close and new credit is limited. Manual underwriting evaluates post bankruptcy financial behavior rather than relying solely on a recovering score.Manual underwtiting can also be used for borrowers that are currently in a Chapter 13 bankruptcy after they have been in the Chapter 13 repayment plan for at least 12 months.

Alternative Credit Documentation

For manual underwriting lenders accept payment history from sources that demonstrate financial responsibility but are not reported to credit bureaus:

Acceptable Alternative Credit Scores

Rent Payments. Twelve months of canceled checks, bank statements or a verification letter from a commercial landlord showing on time rent payments. This is the most important alternative credit reference.

Utility Bills. Twelve months of on time payments for electric, gas, water or trash service. Accounts must be in the borrower's name.

Insurance Premiums. Twelve months of on time payments for auto insurance, renters insurance or life insurance.

Cell Phone Bills. Twelve months of on time mobile phone payments. The account must be in the borrower's name and not part of a family plan in someone else's name.

Documentation Requirements

Borrower's usually need three to four alternative credit references with 12 months of payment history each. Documentation must show account holder's name, payment due dates and amount paid and no late payments in the last 12 months

At Alpine Mortgage, we help borrowers identify which accounts qualify and help gather the proper documentation.

Manual Underwriting Requirements

Because manual underwriting involves more hands on risk assessment requirements are often stricter in other areas to offset the lack of traditional credit data:

Debt to Income Ratio
Manual underwriting requires lower debt to income ratios than automated approval. FHA manual underwriting allows a maximum total debt ratio of 50% with compensating factors. VA manual underwriting must meet residual income requirements.

Cash Reserves
Reserves demonstrate financial stability and provide a cushion for unexpected expenses. Borrower's should be able to document 2 to 3 months of mortgage payments in reserve after closing.

Employment History
Two years of stable employment in the same field is typically required. Self employed borrowers need two years of tax returns showing consistent income.

FHA Manual Underwriting

FHA is the most accommodating loan program for manual underwriting. Key requirements include:

• Minimum of 3 alternative credit references when borrower has no credit scores
• 12 month of on time rent payments
• Maximum debt ratio of 50% with compensating factors

VA Manual Underwriting

VA loans also permit manual underwriting with no minimum credit score set by the VA. Requirements include:

• 2 to 3 alternative credit references
• 12 monts of on time rent payments
• Must meet residual income requirements based on family size and location

How to Get Pre-Approved with Manual Underwriting

Getting pre-approved for a manual underwriting mortgage requires more documentation than a standard application. Here is what to gather:

1. 12 months of rent payments (canceled checks or bank statements)
2. 12 months of utility payments
3. 12 months of insurance payments
4. Last 2 years of W2s
5. Most recent 30 days of paystubs
6. Last 2 months of bank statements
7. Government issued ID

1. Contact Alpine Mortgage for a free consultation
2. Gather documentation for at least 3 alternative credit references
3. Complete our online application
4. Upload documents through our secure portal
5. Underwriter reviews your complete file
6. Receive pre-approval and begin house hunting

Why Choose Alpine Mortgage for Manual Underwriting

Manual underwriting requires a lender experienced with non traditional files. Alpine Mortgage has helped borrowers with no credit scores, thin credit files and complex situations qualify for mortgages when other lenders said no. We are experienced with FHA & VA manual underwriting requirements and can help borrowers identify and document alternative credit.

Call us today at (800) 876-LOAN to speak with one of our manual underwriting mortgage specialists or click here to have one of our manual underwriting home loan specialists contact you.

Manual Underwriting FAQs

Manual Underwriting Resources

• Bad Credit Mortgage Loans
• FHA Loans
• VA Loans
• Mortgage Pre-Approval