How To Get Refer To Approve-Eligible Per AUS To Qualify For Mortgage

This Article Is About How To Get Refer To Approve-Eligible Per AUS To Qualify For Mortgage 

There are two types of mortgage guidelines:

  1. Agency Guidelines (AUS Approval)
  2. Lender Overlays

Gustan Cho Associates Mortgage Group has no overlays on government and conventional loans.

  • GCA Mortgage Group just goes by agency guidelines which are the automated underwriting system findings
  • Most other lenders need to meet agency guidelines but may have lending requirements of their own
  • However, lenders with overlays require to meet the minimum agency guidelines
  • They need to submit mortgage applicant through AUS
  • After they get their AUS approve/eligible per findings, they need to then need to see if the mortgage applicant meets their own lending requirements which are called mortgage overlays
  • At Gustan Cho Associates Mortgage Group, we only need to get an approve/eligible per AUS Findings
  • At Gustan Cho Associates, borrowers do not have to worry about the second step, which is overlays since we do not have any

In this article, we will discuss and cover How To Get Refer To Approve-Eligible Per AUS To Qualify For Mortgage.

How Automated Underwriting System Works

How To Get Refer To Approve-Eligible Per AUS

Every lender needs to submit a mortgage application to either Fannie Mae or Freddie Mac Automated Underwriting System, also referred to as AUS on all loan programs. Whether it is FHA, VA, USDA, Conventional Loans, to proceed with the mortgage process, the Automated Underwriting System needs to render an approve/eligible per AUS Findings.

Here are the three findings AUS yields:


  • Approve/Eligible per AUS means that the AUS renders an automated approval where if all information entered in 1003, the credit report is correct, the loan has an automated approval


  • Refer/Eligible per AUS means that the AUS cannot render an automated approval but may qualify for a manual underwrite

Refer/With Caution:

  • The borrower does not qualify with how AUS is reading the 1003 and credit report

What Does Refer-Eligible Per AUS Mean?

Refer-Eligible per AUS Findings means that the Automated Underwriting System cannot render automated approval.

  • The file needs to be downgraded to a manual underwriting
  • FHA and VA Home Loans allow manual underwriting
  • VA Manual Underwriting Guidelines are the same as HUD Manual Underwriting Guidelines
  • Conventional Loans do not. Nothing is wrong with manual underwriting with FHA and VA Home Mortgages

However, before downgrading the file to manual underwriting, loan officers should do everything possible to get the file an approve-eligible per AUS.

Ways On How To Get Refer To Approve-Eligible Per AUS

The Automated Underwriting System (AUS) is an intricate sophisticated state of the art computer system that analyzes all information about borrowers’ income/credit/disclosures and renders an automated decision within seconds after submission.

  • AUS will only read the information that is on the 1003 and borrowers credit report
  • If credit reports are inaccurate, then AUS will pick up the inaccurate report
  • Credit Disputes on credit reports are not allowed during the mortgage process
  • This because credit disputes automatically discount the derogatory tradelines from the credit scoring model of credit bureaus
  • AUS does not recognize this
  • So any automated findings with credit disputes are not valid
  • Same with public records
  • If borrowers have public records such as bankruptcies and foreclosures that is not reporting on credit reports, AUS will not recognize that and will render an approve/eligible when the borrower is not qualified

All loan officers should not give up and just take a refer/eligible. Loan Officers can run AUS Findings many times. There are ways on how to get refer to approve-eligible per AUS.  We will explain how to get refer to approve-eligible per AUS on this blog. This blog is intended for both borrowers and loan officers.

Gift Funds Is One Way On How To Get Refer To Approve-Eligible Per AUSGift Funds Is One Way On How To Get Refer To Approve-Eligible Per AUS

Gift funds are allowed, especially on FHA Loans. HUD Guidelines On Gift Funds allow 100% gifted funds for the down payment.

  • However, Automated Underwriting System and lenders do not view gifted funds for down payment favorably
  • This holds trues especially for borrowers with under 620 credit scores
  • There are many cases where borrowers  with 100% gifted funds will get a refer-eligible per AUS Findings
  • But if the loan officer changes the gift funds to the borrower’s own funds, the AUS system will render an approve-eligible per AUS.

If the loan officer gets a refer-eligible per AUS, one way on how to get refer to approve-eligible per AUS would be removing gift funds and entering own funds.

Larger Down Payment Is Another Solution On How To Get Refer To Approve-Eligible Per AUS

Another way on how to get refer to approve-eligible per AUS is more skin in the game by borrowers.

  • A larger down payment is a great compensating factor
  • If a borrower with a 580 credit score gets a refer-eligible per AUS on an FHA Home Loan with a 3.5% down payment, try putting 5% to 10% down payment
  • The larger the down payment the fewer risk lenders have so AUS will find it more favorable

On refer automated finding, a larger down payment may be how to get refer to approve-eligible per AUS.

Adding Reserves May Be Potential Solution On How To Get Refer To Approve-Eligible Per AUS

Borrowers who get refer automated findings may try adding reserves and see if the loan officer can trigger that refer to approve-eligible per AUS.

  • Many times one months or more in PITI does wonders and is a great solution on how to get refer to approve-eligible per AUS

This holds true for borrowers with under 620 credit scores, higher debt to income ratios, and substantial outstanding collections and charged-off accounts.

Lower Debt To Income Ratios

What are lower debt to income ratios

Borrowers with higher debt to income ratios and lower scores will often get refer-eligible findings on AUS.

  • By lowering debt to income ratios by paying down or off debts or buying down rates with points may be another solution on how to get refer to approve-eligible per AUS
  • Shopping to get the lowest possible homeowners insurance premium will lower debt to income ratios
  • May want to explore the possibility of going with 7/1 ARM versus a 30-year fixed-rate mortgage
  • Adjustable Rate Mortgages have lower mortgage rates than fixed-rate mortgages

There are many tricks on how to get refer to approve-eligible per AUS to cover on this blog. Every situation is different. To qualify and start the pre-approval process with a direct lender with no overlays, please contact us at GCA Mortgage Group at 262-716-8151 or text us for a faster response. Or email us at Our team of licensed and support staff are available 7 days a week, evenings, weekends, and holidays.

  1. Marie Salter

    My husband and I are in a chapter 13 bankruptcy. We are going to have 12 months of payment to the trustee by December 2020. We have never been late on our payments to the trustee. We would like to qualify for a first time home purchase. We are currently living in San Diego, California, but we are looking to relocate to Georgia (near Atlanta). Our FICO scores right now are just above 600. We have about $50,000 in assets (Bank, 401K, IRA, etc. ). We hope you can help us.

  2. Connie Kennedy

    We are first time home buyers. Ive been an Electrician for over 5yrs and started my own Electrical company in 2020. Ive had a hard time finding someone that will give me a loan since I technically switched jobs this year. We both have great credit and less than 20k in debt total. If you think you can help me please reach out soon

  3. William Rees

    Great informative blog by Gustan Cho Associates on Approve Eligible Per Automated Underwriting System means the borrower meet all of the mortgage lending guidelines for the loan program, whether it is an FHA Loan, Conventional Loan, VA Loan, or USDA Loan. Before the COVID-19 pandemic my wife and I were looking to purchase a house with my VA benefits. Since, I was told that the credit requirement is a 640 score but I am currently at 586. So I am now in the process of trying to find a lender that will work with an individual with a fair credit score.

  4. Sang Mee Yang

    Detached condo. New construction. Closing date 3/4/2021.
    Just found a collection account on my credit report which is not mine. It dropped my score from 757 to 659 in 1 day. Submitted a dispute to Equifax. Received a letter from the company( Southern California Edison) stating they linked the collection account incorrectly to my name. In this case, can the dispute I made still stop me from getting a mortgage?

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