Every application is unique and there are some basic requirements that one needs to qualify for our program:
A FICO score of 550 or more: All applicants need to pass a soft credit check (doesn’t affect your credit score). We all look at your FICO score, recent loan delinquencies, and any foreclosures or bankruptcies. In some cases, a soft credit check might not provide Utopia with enough information to determine your eligibility. So, in such cases, we will reach out and explain how to move forward. For 550 to less than 640 FICO scores, bankruptcy needs to be cleared for at least 2 years. However, for FICO greater than 640, a bankruptcy that has been cleared for more than one year is OK. For applicants with a FICO score of below 650, once approved, you could be auto enrolled in the credit counseling program of Utopia to make you mortgage ready.
A minimum monthly household income of $3,500: You are encouraged to add a co-applicant during the application process as it increases the likelihood of approval. The exact minimum required income will depend on your current debt levels and home prices in your desired metro area. • 3 months of verifiable income:We look for 3 months of steady income. You’re able to add multiple income sources including self-employment. Please note that self-employed income can take a little longer to verify.
• Background check:We run a background check to determine your rental history and criminal background. For criminal background checks, we evaluate the recency and severity of any convictions.
Minimum upfront cash required of $2500: You are expected to pay 1-3% of the price of your dream home or $2500 (whichever is higher) upfront. This money goes into your Utopia Wallet and will be used by you to buy the home when you are mortgage ready.
Debt to Income Ratio with Rent to be less than 50%: Your monthly debt payment plus rental payment should not exceed more than 50% of your gross income.
12 Months of timely rent payment history
A government-issued photo ID
What documentation is required to be approved?
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Utopia needs to verify your income in order to give you a budget so you can begin shopping for a home. We ask that you provide documentation showing your income for at least the last 3 months.
Salary/Hourly Pay:
Most recent pay stubs for the last 3 months (last one must be within 30 days)
Previous year's W-2
Bank Statements for the last 3 months
Income Tax filings for the last 2 years (1st 2 pages are enough)
Independent Contractor:
3 months of most recent pay stubs or pay invoices (last one must be within 30 days)
Year to date Profit & Loss Statement
Bank Statements for the last 3 months
Income Tax filings for the last 2 years (1st 2 pages are enough)
Self-employed:
3 most recent months of bank statements
Proof of Business Ownership. This can be a document from the Secretary of State, a recent tax return, or any official document that shows both your name and the name of your registered business
Income Tax filings for the last 2 years (1st 2 pages are enough)
New Job within the last 3 months:
Last pay stub from previous job
Most recent pay stub from current job
Can I have more than 1 Co-Applicant on my application?
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At this point of time, Our Application process allows 1 Main Applicant and 1 Co-Applicant; So, 2 People only; We encourage you to make the main applicant to be the one with higher income/savings/credit score.
What if I had a bankruptcy or a foreclosure?
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For 550 to less than 640 FICO scores, bankruptcy needs to be cleared for at least 2 years. However, for FICO greater than 640, a bankruptcy that has been cleared for more than one year is OK. For a foreclosure, your name must have been removed from the title at least one year ago.
How long is my approval letter valid?
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Your Utopia approval letter is valid for 30 days and can be easily extended if you need more time to find your dream home.
Will the credit pull on my application impact my credit score?
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No, your credit will not at all be impacted by any credit pull from Utopia as we make a soft credit inquiry or a “soft pull.”
Why was my application denied?
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Your application could be denied if we feel that we can’t help you qualify for a home mortgage in the next 2-3 years. Applications are evaluated on a number of factors such as:
Minimum credit score of 550
A minimum annual income that varies by region
On-time payment history
Debt-to-income ratio (DTI)
Other unique credit circumstances, such as a bankruptcy or foreclosure
How does my Utopia journey look, from start to finish?
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From the start of your application to your move-in day, we want to make sure our process is as simple as possible for our customers. Here’s a breakdown of what you can expect from start to finish:
Apply online and we will run a soft credit check to see whether you’re eligible for the program. This has no effect on your credit score (minimum credit score of 550 required).
Once you are pre-qualified, we will ask for your permission to run a background check and get a copy of your photo ID, and proof of income documents.
We will review your application and usually get back to you within 24-48 hours to let you know if you’re approved to go home shopping. We will also get in touch if we need any additional documents.
After approval, you will receive an email including your utopia approved monthly budget and estimated home budget range.
It’s now time to go home shopping.
Once you find the perfect home from Utopia Listings, you or your agent can express your interest in the property to our team after logging into our website. We will work closely with you and the Listing party to come up with the most reasonable buy back price, monthly rental and other terms & conditions for your chosen home.
We’ll share this proposal with you and the owner, and provide details on all your payments for the upcoming lease, including your monthly home savings and future buyback price.
We’ll ask for your permission to move forward with the offer and pay a deposit towards your down payment (At this stage, you will have to make a small deposit as given in your approval letter—this money will be credited toward your home savings when you buy the property). Once you and the landlord of the listing approve, we’ll get all the documentation done between both parties and get it signed by both parties.
At this point, we’ll ask that you pay your initial home savings contribution (1-3% of the purchase price) and complete a final walkthrough of the home.
Assuming the home passes inspection, we’ll ask you to pay your first month’s rent approximately 7 days before your move-in date. (Any pro-rated rent for the current month could also be requested).
Once you’ve made all the required payments and signed the lease, you’ll be ready to move into your new home!
Whenever you’re ready to buy back your home, our team will work closely with you and the landlord to get everything prepared.
If you’re ready to start your homeownership journey, get pre-qualified here!
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