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It is every borrower’s dream to someday have a place that they can call their own. But buying a home is not half as easy as we would want it to be, especially if you are someone who is struggling to keep its finances together. However, does that mean your dream of being a homeowner is lost forever? Absolutely not! USDA has a loan solution that can help borrowers realize their ultimate vision.

So what is it about USDA loans that is different from traditional loans? To simply answer that question, compared to loans offered by traditional financial institutions, USDA loans are easily processed. However, with ease of process comes indiscriminate risk that is associated with their incompetent assessment. In an effort to minimize this risk and still help prospective homeowners in buying a home, USDA came up with a perfect solution – Guaranteed Underwriting System, also known as GUS.

What is GUS?

This single-family loan program has been designed specifically for USDA’s guaranteed loan plan that helps in carefully determining the eligibility of its applicants. With the help of this flexible platform, lenders and brokers will be able to target rural markets for home loans. Apart from its propensity to reach wider audience, there are number of other reasons that can be attributed to the development of this tool:

  • To ensure that the applicants applying via guaranteed program are evaluated equally through standard credit procedures
  • Make the agency capable of assessing and mitigating risk associated with a guaranteed loan program

Not only will GUS help the lenders and borrowers equally, it will also reduce the processing cost of each loan and also decrease the processing time.

Its Role in Assessing Borrower’s Creditworthiness

GUS was gradually introduced by USDA to helps its partners in conducting comprehensive risk evaluation in short amount of time. The automated system takes borrower’s income, credit history and available cash reserves into account while determining their creditworthiness. Other benefits include:

  • Accelerating the Process:

    with the help of GUS, lenders and brokers are empowered with valuable risk assessment within minutes. This automated tool is simple to use and is designed to lower the processing costs, as well as turnaround times. However, what makes it indispensable to the mortgage industry is its compatibility with other automated underwriting systems.

  • Automated Evaluation:

    the users of GUS are able to access important income relation information, determine borrower eligibility, auto-populate relevant data in respective fields from credit reports etc. in a single place. All these features help brokers and lenders to quickly assess their borrowers and minimize their risk of inaccurate assessment.

  • Predicts Probability of Default:

    what makes this system effective for lenders is its ability to detect a borrower’s propensity to evade their loan. It conducts quick prequalification before the application is submitted.

  • Streamlines Underwriting Process:

    when lenders enter loan application data into GUS, it gets automatically evaluated and the system issues real time proposals for underwriting. Most importantly, it helps reduce the paperwork, making processing faster and more efficient for all the stakeholders.

  • Helps Lenders in Decision Making:

    after evaluating the borrower across all aspects of creditworthiness, the applicant is either accepted or referred by the system as a potential risk. These risk classifications help lenders make an informed decision about loan disbursement. Sometimes the system also recommends the lender to perform manual underwriting because of the indicated risk.

Home loan processing can be tricky business, unless you have strong support system of an expert. We, at Expert Mortgage Assistance, have wide experience in helping clients transact USDA home loans successfully. We not only guarantee trained support, but also help brokers and lenders leverage sophisticated tools like GUS to improve quality of loans. Outsource your requirements to us for making USDA home loan transactions more efficient. To know more about how we can transform your USDA loan process, speak to us today.