Kentucky Rural Housing USDA Highlights for 2021Kentucky USDA Rural Development Guaranteed Lending Program is geared to assist low to moderate income families realize home ownership. Below are some important highlights:
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Author: Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans
KENTUCKY USDA RURAL HOUSING PROPERTY STANDARDS FOR THE GUARANTEED HOME LOAN PROGRAM
Sites must be modest and developed in accordance with any standards imposed by a State or local government. Therefore, the lender must verify that the following requirements are met at the time of application.
- Site size The site size must be typical for the area. (Some acreage is fine as long as it is normal and the appraisal has comparable sales with similar acreage)
- Income-Producing Buildings. The property must not include buildings designed and to be used principally for income-producing purposes. For example barns, silos, greenhouses, or livestock facilities used primarily for income producing agricultural, farming or commercial enterprise are ineligible. However, barn, silos, livestock facilities or greenhouses no longer in use for a commercial operation, used for storage, and outbuildings such as storage sheds are permitted if they are not used primarily for income producing agricultural, farming or commercial enterprise. A minimal income-producing activity, such as maintaining a garden that generates a small amount of additional income, does not violate this requirement. Home-based operations such as childcare, product sales, or craft production that do not require specific features are not restricted. A qualified property must be predominantly residential in use, character and appearance.
- Income-Producing Land. The site must not have income-producing land that will be used principally for income producing purposes. Vacant land or properties used primarily for agricultural, farming or commercial enterprise are ineligible. Sites that have income-producing characteristics (e.g. large tracts of arable land ready for planting) are considered income-producing property. However maintaining a garden for personal use is not in violation of this requirement. A minimal income-producing activity, such as a garden that could generate a small amount of additional income does not violate this requirement. A qualified property must be predominantly residential in use, character and appearance.
- Site Specifications. The site must be contiguous to and have direct access from a street, road, or driveway. Streets and roads must be hard surfaced or all weather surfaced and legally enforceable arrangements must be in place to ensure that needed maintenance will be provided.
- Utilities. The site must be supported by adequate utilities and water and wastewater disposal systems.
Kentucky USDA Rural Development Fee Reduction
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Kentucky USDA Rural Development Fee Reduction
USDA has just announced that they are planning to lower both the Guarantee Fee and the Annual Fee for RHS loans in Fiscal Year 2017. Effective for loans receiving commitments from RHS on or after October 1, 2016, the following fee changes will be in effect
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Student Loans and their Impact in the Total Debt Ratio for a Kentucky Rural Housing USDA Loan Approval
Student Loans and their Impact in the Total Debt Ratio for a USDA Home Mortgage in Kentucky
Recent updates to the 3555 Handbook intended to simplify guidance for the delivery of the guaranteed loan program have caused some misperception in regards to total debt ratio calculations, specifically in the subject of student loans. The Agency is working on revisions to Chapter 11: Ratio Analysis; however, we want to further clarify the subject at this time.
Total debt includes monthly housing expenses plus any other credit obligations incurred by the applicant. Student loan payments must be included in the calculation of the total debt-to-income ratio and captured under liabilities on the application. Student loan payments should be treated as described below:
Fixed payment loans: A fixed payment may be used in the debt ratio when the lender retains documentation to verify the payment is fixed, the interest rate is fixed, and the repayment term is fixed. There must be no future adjustments to the terms of the student loan payments.
Non-Fixed payment loans: Payments for deferred loans, Income Based Repayment (IBR), Graduated, Adjustable, and other types of repayment agreements which are not fixed cannot be used in the total debt ratio calculation. One percent of the loan balance reflected on the credit report must be used as the monthly payment. No additional documentation is required.
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Kentucky USDA Rural Housing Credit Report Requirements Update 2016
February 12, 2016KY USDA Rural Housing Credit Report Update 2016Effective immediately, an applicant’s credit score may be validated with at least two eligible trade lines instead of three trade lines as previously required. Such trade lines consist of credit accounts (revolving, installment, etc.) with at least twelve months of repayment history reported on the credit report. Corresponding revisions to the 3555 Handbook will be posted on the USDA Rural Development’s Regulation and Guidance website on March 9, 2016. At least one applicant whose income or assets are used for qualification must have a valid credit report score or have at least two historical trade line references that have existed for at least 12 months to establish a credit reputation. For applicants without an established credit history and unable to establish the required number of eligible trade lines to validate the credit score, alternative methods may be used to evidence an applicant’s willingness to pay, such as a non-traditional mortgage credit report or multiple independent verifications of trade references per 7 CFR 3555, Section 3555.151 (i)(6). Non-traditional credit may not be used to enhance poor payment records or low credit scores. GUS applications receiving an “Accept” underwriting recommendation, but which fail to meet the credit score validation test using a traditional credit report, must be downgraded to a “Refer” by the lender. In these instances the use of a non-traditional credit history will be required in order to proceed.  Joel Lobb (NMLS#57916)
Senior Loan Officer American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Company ID #1364 | MB73346  The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
, NMLS ID# 57916, (www.nmlsconsumeraccess.org). I lend in the following states: Kentucky |
Kentucky USDA Mortgage Lender for Rural Housing Loans 