Rural Development 502 Direct Loan-Spouse excluded (approval, student loan, Michigan, debts)

[Duddles]

Hello,

My wife and I were recently approved for a RD Direct Loan in Michigan. Upon that approval, we made an offer on a home and it was accepted.

Today, I received a phone call from our local RD office. Evidently, a new ruling came through last Friday that stated that all loans that had not previously been counted toward the DTI due to deferment must now do so. My wife is a recent graduate with student loan debts in deferment and is currently looking for employment.

The RD Officer wanted to exclude my wife from the loan and rerun it with just my name, which hopefully should be fine because the original loan approval was based on my income alone and the only debt I currently have is a car loan.

I've just never heard of a spouse being excluded from a mortgage. My wife is fine with it but I'm just wondering what would happen in the event that something happens to me. Would she have any rights to the home?

I was also wondering if my wife will still count as part of the household when it comes to figuring out the mortgage. Will they count the income for just one person?

We're worried now that everything will fall through because we've never heard of only one spouse being on the loan.

Thanks for any help you can offer us.