It appears USDA has tightened up their requirements for “GUS”. (GUS stands for Govt Underwriting System and is the automated engine for USDA just like DU/LP is for FHA etc . . )
FICO scores below 640 will receive a “REFER” and will need to be manually underwritten by the Agency. Borrowers must have three major compensating factors and proof that the derogatory credit that is driving their fico below 640 was temporary and beyond the borrower’s control. Divorce is not a qualified reason. Medical, death of wage earner or immediate family member, loss of job or reduction in wages can be. All must have documentation to support.