I’m working on an application and with all of the changes lately, I’m not sure if I need a landlord verification? If an applicant has a reliable score over 640, does the rent need to be verified at all? The handbook seems silent on this, but other language suggests it’s not necessary. Is whatever the applicant puts on the RD 410 application acceptable? And how does this work for addressing payment shock?

Sincerely, Verification of Rent 

Dear Verification of Rent,

Let’s tackle your questions one at a time:

1. If the applicant has an acceptable credit score over 640, you do not need to verify their rent.
2. The rent amount does not need to be verified beyond what is reported on the application.
3. The amount they are paying in rent should be reflected on the application in section V, Monthly Income and Combined Housing Expense Information, and what they indicate here is what is used to complete the payment shock calculation.

Here’s the handbook citation that’s applicable:

From 4.12 A  For applicants with no outstanding judgments obtained by the United States in a Federal court, with no significant delinquency, and who have more than one credit score listed on their TMCR that result in a credit score of 640 or higher on their TMCR, Exhibit 4-4 need not be used to identify indicators of unacceptable credit handling. In addition, a verification of rent and Form RD 1944-61, Credit History Worksheet, need not be completed.

I hope this helps, and I know it will be less work when you don’t have to verify rent – no more tracking down absentee or unresponsive landlords!

Sincerely, Dear Sher  

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Dear Sher is a regular Self Help Builder News feature. If you have a question you would like answered or researched by Sher, please send it to asisco@rcac.org and your question may be featured in a future publication.