My fiance and I would like to purchase a house.  Our problem is her credit, not that it's bad, just that there isn't any.  Her father always encouraged her to pay cash for things.  She has around $10,000 in savings, and I have very little.  I have good credit (720 FICO) and she has little to none.  She has purchased a car in July, and opened a line of credit with a furniture store a month ago.  I want her on the loan for her income, not that I want to go above my head, just go above what I'm limited to.  According to my salary and debt (back end would be 41% at a $750.00 PIT and HO, front end is fine), I can be approved up to $120,000 on a USDA loan.  We want to be in the $150,000 range.  Is there anything out there that will allow her to be on the loan to help the total DTI?

Thanks in advance.

would her $10,000 be enough to payoff $166.07 in your consumer debt?, if so doing so should get you there.  at 5.00% each $1,000 comes out to $5.368 in principal and interest i.e. $150,000 =150 x 5.368 = $805.23 Principal and interest, compare to $120,000 = 120 x 5.368 =$644.16.  The difference in the $150,000 loan is that your payment would be $166.07 higher per month, so another way of keeping your debt ratio in line is payoff/paydown enough debt to eliminate this difference.  I would caution before you move forward on any of this, that you apply for the loan first, and have the loan officer guide you thru this.

With the car purchase in July, and a line of credit opened in August, this may give her a credit score.  Are you monitoring her credit score?  It may not be as high as you need, but it will give you an idea of where to start.

Make sure she uses the credit, but not over 50%.

USDA will allow alternate credit...have your LO get it scored through their credit provider.

FHA works with no credit scores also.  Contrary to popular belief, lenders will still do this loan.  I see no reason based on information you've provided that this could not be put together as you describe.  It might be the unmarried co-borrowers piece that is hanging you up right now with your current lender, but I'm guessing you're okay.  Shop around if your current bank or broker is telling you no.

USDA or The Rual Developement Loan Program will allow a higher back end ratio with credit scores above 680 and I personally have closed USDA loans with up to a 50% debt to income ratio, that is if you have strong compensating factors according to its guidelines. Also your fiance can use alternative credit (utilities preferably ) with the USDA Rural Developement Program so that she can also go on the note which how you really want the buyers on the loan.