Kentucky USDA Rural Development Single Family Housing Guaranteed Loan Program

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Logo of the USDA Rural Development office, part of the Department of Agriculture. (Photo credit: Wikipedia)
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Kentucky USDA Rural Development Single Family Housing
Guaranteed Loan Program

APPLICANT BENEFITS

 100 percent financing available with no down payment required. Eligible repairs and
closing costs may be included in the loan up to the appraised value of the property.
 Upfront guarantee fee may be included in the loan amount above the appraised value.
 Existing or new construction homes including all Planned Unit Development’s (PUD’s) are
eligible.
 Condominiums may be eligible.
 30 year loan terms with fixed interest rates.
 No pre-payment penalties.
 Satisfactory credit and qualifying ratios apply. Nontraditional credit histories may be
eligible.

APPLICANT REQUIREMENTS

The following information is not all inclusive. For complete information refer to RD
Instruction 1980-D, supplemented by applicable Administrative Notices (AN) available
online at http://www.rurdev.usda.gov/RegulationsAndGuidance.html http://www.rurdev.usda.gov/RegulationsAndGuidance.html. 
APPLICANT ELIGIBILTY
The applicant must:
 Be a U.S. Citizen, legally admitted as a permanent resident, or be a qualified alien.
 Have the legal capacity to incur the loan obligation.
 Be unable to secure credit with rate and terms reasonable to the applicant without a
guarantee from the Single Family Housing Guaranteed Loan Program (SFHGLP).
 Not own a home within the local commuting area at the time of loan closing. Applicants that
do own a home that is structurally unsound or functionally inadequate, or is located outside
of the local commuting area may still be eligible for guaranteed loan consideration.
 Occupy the home purchased in an eligible rural area as their permanent primary residence.
 Have stable and dependable income to ensure repayment ability. Households may not
exceed the moderate income limit established for the applicable rural area.
 Have an acceptable credit history that demonstrates the willingness and ability to meet
financial obligations as they become due. If applicants exhibit unacceptable credit per RD
Instruction 1980-D, section 1980.345(d) the approved lender may still consider the
applicant if documented evidence of strong compensating factors as outlined in section
1980.345(d)(3) exists.

ANNUAL INCOME LIMITS

 Annual income includes the total gross income of the applicant, co-applicant, and any other
adult (age 18 and up) household members.
 Adjustments to annual income may be deducted for program eligibility determination.
Deductions may be made for dependants, eligible annual childcare expenses, disability
expenses, and annual medical expenses for elderly families. Please discuss eligible
deductions with your SFHGLP contact.
 Income limits are published for each county as an Exhibit to RD Instruction 1980-D and are
available online at: http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

REPAYMENT ABILITY: DEBT/INCOME RATIOS

 Repayment ability is determined by calculating the following ratios:
– PITI (Principal, Interest, Real Estate Taxes, and Homeowner Insurance): The total PITI
payment divided by the repayment income must be 29 percent or less.
– Total Debt (TD): The PITI payment plus all other monthly debt obligation payments
divided by the repayment income must be 41 percent or less.
 Repayment ratios that exceed 29 and/or 41 percentmay be approved by Rural
Development when a ratio waiver request is provided by the approved lender. The ratio
waiver must document and provide evidence of strong compensating factors to support the
request. USDA Rural Development Single Family Housing Guaranteed Loan Division October 2012
1400 Independence Ave., S.W. Washington D.C. 20250-0784
202.720.1452
Examples of strong compensating factors include but are not limited to:
– Current rent/housing payment is equal to or less than the proposed PITI.
– Applicant has a history of devoting a similar percentage of income to housing expense
similar to the PITI over the previous 12 months.
– Strong credit score and repayment history.
– Reserves are available post loan closing, which evidence the applicant’s ability to
accumulate savings.

PROPERTY REQUIREMENTS
ELIGIBLE RURAL AREA

The property must be located in an eligible rural area as defined in 7 CFR 3550.10 as:
1. Open country which is not part of or associated with an urban area.
2. Any town, village, city or place, including the immediate adjacent densely settled area,
which is not part of or associated with an urban area and which:
a. Has a population not in excess of 10,000 if it is rural in character, or
b. Has a population in excess of 10,000 but not in excess of 20,000, is not contained within
a Standard Metropolitan Statistical Area, and has a serious lack of mortgage credit for
very low, low and moderate income households as determined by the Secretary of
Agriculture and the Secretary of HUD.
Property eligibility is available online and through GUS.

EXISTING HOMES

 Properties must meet HUD Handbooks 4150.2 and 4905.1. An FHA Roster appraiser or
licensed residential appraiser deemed qualified by the approved lender may certify to this
determination.
 A separate home inspection report prepared by the appraiser or a home inspector deemed
qualified by the approved lender is an acceptable option to ensure properties meet
minimum standards.
 Homes must be structurally sound, functionally adequate and in good repair, or will be
improved to meet good repair.
 There are no thermal performance standards for existing homes.
 Private water systems/wells: The local health authority or state certified laboratory must
perform a water quality analysis, which must meet state and local standards.
 Private septic systems: The septic system must be free of observable evidence of failure. An
FHA Roster appraiser, government health authority, licensed septic professional or
qualified home inspector may perform the septic system evaluation.
 Termite: If required by the lender, appraiser, inspector, or State law, a pest inspection must
be obtained to confirm the property is free of active termite infestation.
 Repairs: Any repairs necessary for the dwelling to be structurally sound, functionally
adequate and in good repair must be completed prior to the request of the loan note
guarantee. Exception: Escrow accounts that meet the requirements of RD Instruction
1980-D, section 1980.315 are allowed for exterior weather delayed repairs. When eligible
escrow accounts are established per section 1980.360(2)(ii) the loan note guarantee will be
issued without the repairs complete.
 Existing homes have been completed for more than 12 months or have been completed for
less than 12 months but have been previously occupied. USDA Rural Development Single Family Housing Guaranteed Loan Division October 2012

NEW CONSTRUTION

 Evidence the home was built in accordance with certified plans and specifications (e.g.,
International Residential Building Code, CABO, BOCO, etc.) must be obtained through an
eligible building permit, certificate of occupancy, or certification for a qualified individual or
organization that reviews plans and specifications.
 Evidence of construction inspections performed throughout the project in accordance with
section 1980.341(b)(2) must be retained. Acceptable documentation includes an eligible
certificate of occupancy or copies of three inspections performed: (1) inspections prior to
footing and foundation poured, (2) inspections of plumbing, electrical, and mechanicals
before the shell is enclosed, and (3) a final inspection will meet requirements.
 Evidence of a builder’s warranty. Minimum one year issued by the builder. If the builder
has offered a 10 year insured builder’s warranty acceptable to the Agency, this may be
accepted and evidence of construction inspections will be waived.
 Thermal performance requirements must meet the 2006 IECC code. An eligible building
permit, certificate of occupancy, final inspection, or 10 year insured builder’s warranty is
acceptable evidence this requirement has been met.
 New construction homes have been completed (as evidenced by a certificate of occupancy)
for less than 12 months and have never been occupied.
 New manufactured homes must be purchased from an approved dealer –contractors (your
SFHGLP contact can provide a list of those approved in your state). A unit is considered
new if the purchase agreement is dated within 12 months of the date the unit was
manufactured. The date of manufacture is available on the factory installed plate on the
unit.

LOAN REQUIREMENTS
LOAN PURPOSES

 Loans must be secured by a first lien on real property in an eligible rural area.
Loan funds may be used to:
 Purchase an existing or new construction (stick built, modular, or manufactured) home.
 Purchase or pay off a site as part of a new construction package.
 Purchase and improve an existing home. Improvements must be complete before a loan
note guarantee will be issued. Exception: Escrow accounts are allowed for weather delayed
exterior repairs only.
 Include eligible loan fees, including legal fees, title services, and eligible closing costs.
 Refinance existing Section 502 Direct and Guaranteed loans. If only the principal balance
and the guarantee fee will be financed, no new appraisal is required. If the applicant wishes
to include eligible closing costs into the loan, a new appraisal is required. A new appraisal is
always required for Section 502 Direct loan refinances.
LOAN LIMITS
 The maximum loan amount is 100 percent of the appraised value plus the upfront
guarantee fee.

Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

Author: Louisville Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Zero Down Payment Home Loans

I have helped over 589 Kentucky families buy or refinance their home over the last 18 years. Realizing that this is one of the biggest, most important financial transactions a family makes during their lifetime, I always feel honored and respected when I am chosen to originate their personal home loan. You can count on me to deliver on what I say, and I will always give you honest, up-front personal attention you deserve during the loan process. I have several advantages over the large banks in town. First, I can search and negotiate for your loan options through several different mortgage companies across the country to get you the best deal locally. Where most banks will offer offer you their one set of loan products. I have access to over 10 different mortgage companies to broker your loan through to get you the best pricing and loan products that may not fit into the bank's program due to credit, income, or other underwriting issues. You will not get lost in the shuffle like most borrowers do at the mega banks; you're just not a number at our company, you are a person and we will treat you like one throughout the entire process. Give us a try or let us compare your options on your next mortgage transaction. Call me locally at 502-905-3708. Free Mortgage Pre-Qualifications same day on most applications. Email me at kentuckyloan@gmail.com with your questions I specialize in Kentucky FHA, VA ,USDA, KHC, Conventional and Jumbo mortgage loans. I am based out of Louisville Kentucky. For the first time buyer with little money down, we offer Kentucky Housing or KHC loans with down payment assistance. Customer Testimonials 😍😍😍 We just moved here the first of January in 2017 from Ohio to the Louisville, KY area and we found Joel's website online. He was quick to respond to us and got back the same day on our loan approval. He was very knowledgeable about the local market and kept us up-to date throughout the loan process and was a pleasure to meet at closing. Would recommend his services. Angela Forsythe "We were searching online for mortgage companies in Louisville, Ky locally to deal with and found Joel's website, and it was a godsend. He was great to work with, and delivered on everything he said he would do. I ended up referring my co-worker at UPS, and she was very pleased with his service and rates too. Would definitely vouch for him." September 2016 Monica Leinhardt "We contacted Joel back in July 2011 to refinance our Mortgage and he was great to work with. We contacted several lenders locally and online, and most where taking almost 60 days to close a refinance, Joel got it done in 23 days start to finish,I would definetly recommmend him. He got us 3.75% with just $900 in closing costs on our FHA Streamline loan. Kayle Griffin “Joel is one of the best Mortgage Brokers I have ever worked with in my sixteen years in the real estate and mortgage business.” May 25, 2010 Tim Beck “Joel has always worked very hard to keep his word and to work out seasonable solutions to difficult problems. He is truly an expert in FHA and other type loans.” September 1, 2010 Nancy Nalley “I have worked with Joel since 1998. He is a great loan professional.” I refer most of my Louisville, Kentucky area home buyers to him and he always take special care of them. August 23, 2012 Jon ClarK “Joel Lobb is a real professional in the lending industry, with many years of experience, he is the one to go to for any mortgage lending needs.” August 22, 2011 RICHARD VOLZ , Residential Sales , Remax Foursquare Realty “When looking to purchase our new home in 2006, I had the pleasure of meeting Joel Lobb. Not only was he personable and easy to reach, he was extremely knowledgable in his field and made sure to find us the best rate and a top notch mortgage company. We were able to complete the process in less than 3 weeks with his expertise. I find Joel to have the utmost high integrity and I recommend him to anyone who say's they are need of mortgage assistance. He is also fantastic and keeping everyone up to date on the latest in the housing industry through his twitter posts. He provided great results for our family and we still communicate to this day!” August 21, 2010 Stacie Drake "We first use Joel on our new home purchase in 2007 in St Matthews, Kentucky area and he was great to work with. We have since refinanced our home with him in 2010 when rates got really low and he has always delivered on what he says. I could not imagine using anyone else." Melody Glasscock March 2014 Absolutely Amazing!! I emailed Joel after I had just got a denial from a bank and just thought i would try to get some advice on what my next steps would be to get a house. I honestly didn't expect to even get a reply because my credit is not great. That was about a week and a half ago. I just signed a contract on a house last night. ONLY because of Joel Lobb. He even worked with us throughout the weekend, which shocked me. Best decision I have ever made. THANK YOU SO MUCH FOR WORKING WITH US THROUGHOUT THE ENTIRE PROCESS. Cee Bellisle August 2017 Contacted him about buying a home and he was great to work with. I was moving to Louisville Ky to take a new job and he walked me through the entire process. He explained to me all the different options for FHA, VA, USDA mortgage loans and credit score requirements versus Fannie Mae. Since I was a first time home buyer I needed alot of help and guidance. I would definitely recommend him. Fast to respond and available to answer questions that I or my realtor had after hours. Anderson Johnson April 2018 Wow, what a great loan officer. I was referred to him by our agent and he was great to work with. We used him for a USDA no money down loan in Shelby County and we were really impressed. We were afraid we could not buy a home since we did not have money saved for a down payment, but Joe l was able to get us a zero down loan and we even got our appraisal fee and good faith deposit back at closing. We actually got money back at closing!!! I Can't think him enough. Our family moved from our apartment in the south end of town to get our own home with 5 acres for our kids and 2 dogs, at a payment that is equal to our rent payment also. .Thanks Again Joel. May god bless you Patty Locker We contacted Joel about buying a house on our move from Ohio for my husband's job transfer with Ford. We put a lot of trust in him since we were new to the area and first time home buyers in the Louisville KY market, and he always delivered on what he said. It took us a while to find a home due to the lack of homes, but once we got one, he was always quick to respond our questions via text or email ,and kept us informed through the process. We got to meet him at the closing and he was super nice and even got us a closing gift for our home which we didn't expect at all. Super nice guy 😀!!! I would definitely recommend him for a local Home loan in the Louisville area. pam dolby I got a VA loan with Joel and he was great. He is an ex-army guy so he could relate to my past experiences of being a veteran and moving around the country a lot. I had some credit issues that required a little extra work but Joel was able to find A VA lender to approve my situation as far as having past bad credit problems and a lower credit score. We closed yesterday on our home here in Louisville and we could not be happier. We finally have a home of our own thanks to Joel . I would definitely recommend him for a mortgage loan. Great experience and closed 8 days before expected close date so we were able to move in early. larry summit I contacted Joel about the $10,000 KY Housing Grant last month and we were able to get it and I just closed on my home. He was great to work with and if you are a first time home buyer here in Louisville, I would definitely contact him. I met him at his office and he was very nice and knowledgeable and kept me informed through the process. No surprises either so I was very happy. I am new homeowner thanks to Joel . Joel Lobb Senior Loan Officer American Mortgage Solutions, Inc. 10602 Timberwood Circle Suite 3 Louisville, KY 40223 phone: (502) 905-3708 Fax: (502) 327-9119 kentuckyloan@gmail.com http://www.mylouisvillekentuckymortgage.com/ Company ID #1364 | MB73346E This website is not an government agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency. http://www.nmlsconsumeraccess.org/ Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. NMLS#57916 http://www.nmlsconsumeraccess.org/ . The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

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