Fiscal Year 2022 Conditional Commitment for Kentucky USDA Rural Housing Loans

Conditional Commitment for Kentucky USDA Rural Housing Loans


Fiscal Year 2022 Conditional Commitment NoticeWith the start of Fiscal Year 2022 (FY) soon approaching, please take a few minutes to review the Single-Family Housing Guaranteed Loan Program (SFHGLP) Conditional Commitment process. We hope you find this information helpful.FY 2022 will begin October 1, 2021 and ends at the close of business September 30, 2022.Fee Structures:An upfront guarantee fee of 1.00 percent and an annual fee of .35 percent will apply to both purchase and refinance transactions for FY 2022.Issuance of Conditional Commitments:At the beginning of each fiscal year, funding for the guaranteed loan program is not available for a short period of time – approximately two weeks. USDA anticipates this brief lapse in funding to continue for FY 2022. During the temporary lapse in funding, Rural Development – Rural Housing Service (RHS) will issue Conditional Commitments (Form RD 3555-18/18E) “subject to the availability of commitment authority” for purchase and refinance transactions. The issued Conditional Commitment will include the following:“Funds are not presently available for this Conditional Commitment. The Rural Development-Rural Housing Service (RHS) obligation under this Conditional Commitment is contingent upon the availability of an appropriation from which payment for contract purposes can be made. No legal liability on the part of RHS for any payment on this Conditional Commitment may arise until funds are made available to RHS for this Conditional Commitment and until the Lender receives notice of such availability, to be confirmed in writing by RHS.  More specifically, this Conditional Commitment is subject to RHS receiving sufficient funds (in the Program Funds Control System for the Single Family Housing Guaranteed Loan Program for the Type of Assistance and State of application submission) to fund this and all prior eligible outstanding applications in their entirety in the time and date order received. When such funds become available, RHS will notify the lender, and the guarantee process will continue subject to all applicable Agency regulations and conditions set forth in this Conditional Commitment. RHS will not reserve loan funds for applications in process during this timeframe. Lenders may close the loan as scheduled. The lender will assume all risk of loss for the loan until RHS obligates funds and the Loan Note Guarantee is subsequently issued. When the lender requests the Loan Note Guarantee, the lender must certify to the Agency, using the process provided in this commitment, that there have been no adverse changes to the borrower’s financial condition since the date the Conditional Commitment was issued by the Agency. The lender will submit the appropriate guarantee fee at the time they request the Loan Note Guarantee. The loan will be subject to an annual fee of 0.35 percent over the average scheduled unpaid principal balance of the loan. The Agency will not be able to issue the Loan Note Guarantee until these conditions are met and funding is obligated.”The application processing workflow is as follows:Rural Development will continue to accept complete guaranteed loan applications for purchase and refinance loan transactions from approved lenders;Rural Development will process, approve, and issue Conditional Commitments for those applications that are eligible “subject to the availability of commitment authority”;Lenders may close loans as scheduled;When funds become available, Rural Development will utilize the Electronic Customer File (ECF) system to advance the file to “Obligate Application” for Conditional Commitments that were issued for loans subject to the availability of commitment authority;Once loans are obligated, Rural Development may process lender’s Loan Note Guarantee requests when the loan closing is verified, and all conditions of the Conditional Commitment are satisfied;Lenders assume all loss default risk for the loan until Rural Development is able to obligate the loan and issue the Loan Note Guarantee.  Thank you for your participation in the USDA Single Family Housing Guaranteed Program. We look forward to serving you in FY 2022!

Posted by Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA  Email ThisBlogThis!Share to TwitterShare to FacebookShare to Pinterest

Conditional Commitment for Kentucky USDA Rural Housing Loans


Fiscal Year 2022 Conditional Commitment NoticeWith the start of Fiscal Year 2022 (FY) soon approaching, please take a few minutes to review the Single-Family Housing Guaranteed Loan Program (SFHGLP) Conditional Commitment process. We hope you find this information helpful.FY 2022 will begin October 1, 2021 and ends at the close of business September 30, 2022.Fee Structures:An upfront guarantee fee of 1.00 percent and an annual fee of .35 percent will apply to both purchase and refinance transactions for FY 2022.Issuance of Conditional Commitments:At the beginning of each fiscal year, funding for the guaranteed loan program is not available for a short period of time – approximately two weeks. USDA anticipates this brief lapse in funding to continue for FY 2022. During the temporary lapse in funding, Rural Development – Rural Housing Service (RHS) will issue Conditional Commitments (Form RD 3555-18/18E) “subject to the availability of commitment authority” for purchase and refinance transactions. The issued Conditional Commitment will include the following:“Funds are not presently available for this Conditional Commitment. The Rural Development-Rural Housing Service (RHS) obligation under this Conditional Commitment is contingent upon the availability of an appropriation from which payment for contract purposes can be made. No legal liability on the part of RHS for any payment on this Conditional Commitment may arise until funds are made available to RHS for this Conditional Commitment and until the Lender receives notice of such availability, to be confirmed in writing by RHS.  More specifically, this Conditional Commitment is subject to RHS receiving sufficient funds (in the Program Funds Control System for the Single Family Housing Guaranteed Loan Program for the Type of Assistance and State of application submission) to fund this and all prior eligible outstanding applications in their entirety in the time and date order received. When such funds become available, RHS will notify the lender, and the guarantee process will continue subject to all applicable Agency regulations and conditions set forth in this Conditional Commitment. RHS will not reserve loan funds for applications in process during this timeframe. Lenders may close the loan as scheduled. The lender will assume all risk of loss for the loan until RHS obligates funds and the Loan Note Guarantee is subsequently issued. When the lender requests the Loan Note Guarantee, the lender must certify to the Agency, using the process provided in this commitment, that there have been no adverse changes to the borrower’s financial condition since the date the Conditional Commitment was issued by the Agency. The lender will submit the appropriate guarantee fee at the time they request the Loan Note Guarantee. The loan will be subject to an annual fee of 0.35 percent over the average scheduled unpaid principal balance of the loan. The Agency will not be able to issue the Loan Note Guarantee until these conditions are met and funding is obligated.”The application processing workflow is as follows:Rural Development will continue to accept complete guaranteed loan applications for purchase and refinance loan transactions from approved lenders;Rural Development will process, approve, and issue Conditional Commitments for those applications that are eligible “subject to the availability of commitment authority”;Lenders may close loans as scheduled;When funds become available, Rural Development will utilize the Electronic Customer File (ECF) system to advance the file to “Obligate Application” for Conditional Commitments that were issued for loans subject to the availability of commitment authority;Once loans are obligated, Rural Development may process lender’s Loan Note Guarantee requests when the loan closing is verified, and all conditions of the Conditional Commitment are satisfied;Lenders assume all loss default risk for the loan until Rural Development is able to obligate the loan and issue the Loan Note Guarantee.  Thank you for your participation in the USDA Single Family Housing Guaranteed Program. We look forward to serving you in FY 2022!

Effective on 9/18/21, Fannie Mae announced that their Automated Underwriting System will now take an AVERAGE of the two scores for qualifying

Effective on 9/18/21, Fannie Mae announced that their Automated Underwriting System will now take an AVERAGE of the two scores for qualifying https://kyfirsttimehomebuyer.wordpress.com/2021/08/18/effective-on-9-18-21-fannie-mae-announced-that-their-automated-underwriting-system-will-now-take-an-average-of-the-two-scores-for-qualifying/ via
@kentuckyloan
#creditscore #ficoscore #mortgage #homeloan #mortgagebroker

Effective on 9/18/21, Fannie Mae announced that their Automated Underwriting System will now take an AVERAGE of the two scores for qualifying https://kyfirsttimehomebuyer.wordpress.com/2021/08/18/effective-on-9-18-21-fannie-mae-announced-that-their-automated-underwriting-system-will-now-take-an-average-of-the-two-scores-for-qualifying/ via @kentuckyloan #creditscore #ficoscore #mortgage #homeloan #mortgagebroker

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Benefits and Drawbacks of Kentucky VA Mortgage Loans

Kentucky VA Mortgage  Loans

Louisville Kentucky Mortgage Loans

Kentucky VA Mortgage  Loans

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Kentucky USDA Rural Housing Changes for Below

USDA Advance Copy Notice HB-1-3555 Chapter 11
USDA has announced that Chapter 11 of the HB-1-3555 will be updated and an advanced copy has been provided.  Changes will become effective after USDA issues a Special Procedure Notice.

  • Clarification was added that revolving accounts with no outstanding balance are not required to be closed.
  • USDA eliminated guidelines provided that a retained property that has been rented for 24 months or longer may be omitted from the DTI, and
  • Added guidance that the income received from rents may only be included in the repayment calculation if the property has been rented for 24 mo. or more.
  • Guidelines were added that monthly payment for borrowers in debt management plans must be included in the DTI.
  • The calculation guidelines for Non-Fixed Student Loan Payments were updated removing the requirement for the greater of calculation to be used and added guidance for when the payment amount is zero.
  • Additional guidance was added that compensating factors supporting Debt Ratio Waivers for manually underwritten loans must be documented.
  • Clarification was added that federal, state and local taxes don’t need to be included in the DTI unless there is a payment plan in place.

Refer to the Advance Copy Notice HB-1-3555 Chapter 11 and Chapter 11: Ratio Analysis

What is a debt to income ratio for a Kentucky Mortgage?

A debt to income ratio, commonly referred to as DTI, is the ratio of the amount of monthly expenses you have relative to your gross (before tax) income.

The automated underwriter will look at two ratios when analyzing your DTI: your front end DTI ratio and your back end DTI ratio.

Front End DTI

The front end DTI is the ratio of your new housing payment including taxes and insurance relative to the amount of income you earn. The front end DTI ratio excludes all other debts and simply analyzes your income relative to the payments on the new mortgage plus tax and insurance.

So, if your mortgage payments including tax and insurance are $1,000 and you earn $4,000 per month in gross income, your front end DTI would be 25% ($1,000 / $4,000 = 25%).

Generally, the automated underwriter likes to see front end DTI ratios below 40%, although it will approve higher front end DTI ratios with compensating factors like high credit scores, money in the bank, low loan to value ratio, etc.

Back End DTI

The back end DTI is the ratio of all of your expenses appearing on your credit report plus your new mortgage payment including taxes and insurance divided by your gross monthly income. The back end DTI ratio does not include things like utilities, health insurance or groceries. It is calculated using only the liabilities appearing on your credit report plus any child support or garnishments that may appear on your paystubs.

So, to continue our example from above, if your mortgage payments with tax and insurance are $1,000 per month, you have a $250 car payment, $250 in credit card payments and a gross income of $4,000, your back end DTI is 37.5% ($1,500 / $4,000 = 37.5%).

Generally the automated underwriter likes to see back end DTI ratios under 45%. However, it will approve loans with a 55% back end DTI or higher if there are compensating factors.

It is important to understand what a debt to income ratio is, however, you do not have to calculate it yourself. Your Loan Originator and your Processor will do this for you.

Louisville Kentucky Mortgage Loans

A debt to income ratio, commonly referred to as DTI, is the ratio of the amount of monthly expenses you have relative to your gross (before tax) income.

The automated underwriter will look at two ratios when analyzing your DTI: your front end DTI ratio and your back end DTI ratio.

Front End DTI

The front end DTI is the ratio of your new housing payment including taxes and insurance relative to the amount of income you earn.  The front end DTI ratio excludes all other debts and simply analyzes your income relative to the payments on the new mortgage plus tax and insurance.

So, if your mortgage payments including tax and insurance are $1,000 and you earn $4,000 per month in gross income, your front end DTI would be 25% ($1,000 / $4,000 = 25%).

Generally, the automated underwriter likes to see front end DTI ratios below 40%, although…

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VA Updated Guidance for Borrowers Affected Financially by COVID-19

VA Updated Guidance for Borrowers Affected Financially by COVID-19

Louisville Kentucky Mortgage Loans

VA Updated Guidance for Borrowers Affected Financially by COVID-19

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Here are all the $0 Mortgage options in Kentucky

Here are all the $0 Mortgage options in Kentucky

VA – available to veterans, surviving spouses and active military. • VA Mortgages are always $0 down.• FICO Score – 620 preferable.• Need DD214 (honorable discharge) and Certificate of Eligibility.• Seller can pay up to 4% of closing costs.

USDA: the location of the property determines the $0 Down.• Seller can pay 6% of closing costs. • Income Limitations – Any primary home.

. FHA $0 Down – one of my lenders offers FHA Down Payment Assistance by way of a 2nd Mortgage.• FICO Score 620. • Ideal for First Time Home Buyers. • 2 Mortgages: 1 for 96.5% and 2nd for 3.5%.• Largest loan size based on county: $356,362• Seller can pay closing costs up to 6% of price

Louisville Kentucky Mortgage Loans

Here are all the $0 Mortgage options in Kentucky

VA – available to veterans, surviving spouses and active military. • VA Mortgages are always $0 down.• FICO Score – 620 preferable.• Need DD214 (honorable discharge) and Certificate of Eligibility.• Seller can pay up to 4% of closing costs.

USDA: the location of the property determines the $0 Down.• Seller can pay 6% of closing costs. • Income Limitations – Any primary home.

. FHA $0 Down – one of my lenders offers FHA Down Payment Assistance by way of a 2nd Mortgage.• FICO Score 620. • Ideal for First Time Home Buyers. • 2 Mortgages: 1 for 96.5% and 2nd for 3.5%.• Largest loan size based on county: $356,362• Seller can pay closing costs up to 6% of price

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Kentucky Home Loan Program Requirements for FHA, VA, USDA and Conventional Mortgage loans.

USDA

Minimum credit score: 620
100% maximum LTV
Manual Underwrites
No maximum loan amount
USDA Streamlined, Streamlined-Assist, and Rate/Term refinances allowed

Kentucky First-Time Homebuyer Loan Programs for FHA, VA, KHC and USDA Mortgage Loans in Kentucky

FHA

  • Minimum credit score
  • 580 AUS Approved
  • 580 Manual
  • Non-Credit Qualifying Streamline refinances allowed
  • Gift funds allowed for down payment and closing costs
  • Cash out 80% LTV

VA

  • Minimum credit score
  • 600AUS approved
  • 620 manual
  • Cash-out up to 90% LTV
  • Foreclosure/Short Sale/Bankruptcy <2 years allowed with AUS Approval

USDA

  • Minimum credit score:620
  • 100% maximum LTV
  • Manual Underwrites
  • No maximum loan amount
  • USDA Streamlined, Streamlined-Assist, and Rate/Term refinances allowed

CONVENTIONAL

  • Minimum credit score:620
  • Fannie Mae
  • Freddie Mac
  • Standard and High Balance
  • HomeReady
  • HomePossible

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FHA announces major changes in in Mortgagee Letter 2021-13

FHA announces major changes in in Mortgagee Letter 2021-13

Louisville Kentucky Mortgage Loans

FHA announces major changes in in Mortgagee Letter 2021-13. We can now calculate your student loan payments based on 0.5% of the balance or take a Income Based Repayment Plan! FHA Updates the rules on Student Loan monthly payments deferred or Income Based Repayment plan… (4) Calculation of Monthly Obligation For outstanding Student Loans, regardless of payment status, the Mortgagee must use: • the payment amount reported on the credit report or the actual documented payment, when the payment amount is above zero; or • 0.5 percent of the outstanding loan balance, when the monthly payment reported on the Borrower’s credit report is zero.

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