- Annual Qualifying Income – The requirement for calculations to be included on the Income Calculation worksheet have been removed and should now be included on Attachment 9-B, the underwriter transmittal summary, FNMA form 1008/Freddie form 1077, or equivalent
- 4506-T – The requirement for asset statements to be reviewed to ensure borrowers have no additional income sources has been removed.
- Repayment Income – MCC income must now be included in repayment income.
- Boarder Income – USDA now considers a boarder as a household member and a boarder’s income must now be included in annual income calculation. Rent paid by boarders that is reported on tax returns must also be included in annual income.
- Capital Gains – USDA removed requirement from Repayment Income to provide evidence showing borrowers own additional property or assets that may be sold if additional income is needed to support the mortgage obligation
- Commission – The borrower must now show one year history in same or similar line of work to include commission in repayment income.
- Fellowship, Stipend, Scholarship – Scholarship award letters must now provide date of termination and USDA will no longer presume benefits with no expiration date will continue. USDA also added guidelines for GI Bill income and stated it cannot be included in annual or repayment income.
- MCC – This income must now be included in repayment income, but no history is required. A copy of the W-4 from employer is required to verify borrower is taking tax credit on monthly basis. Note: MCC’s are ineligible with FWL as qualifying income.
- Unreimbursed Business Income – only taxable income is allowed to be included in repayment income
- Section 8 – USDA removed requirement for section 8 income to be deducted from the monthly PITI to determine DTI if it is paid directly to the loan servicer when included in the repayment income.
- Self Employed Income – Federal tax returns must now be reviewed to determine gross income for annual calculations. Removed requirement to deduct business loss before entering as repayment income into GUS or on loan application. Clarified documentation requirements as most recent 2 years of federal tax returns / transcripts & YTD P&L may be audited or unaudited
- Social Security Income – clarified documentation options and will allow social security benefit statement or form SSA-1099/1042S to source
- Temporary Leave – The history requirements for repayment income has been changed and now income must be received by loan closing.
- Cash on Hand – The underwriter must review the reasonableness of accumulation based upon income stream, spending habits, etc. and cash on hand can no longer be included in reserves
- Gift Funds – Clarification provided on how gift funds must be sourced when gift funds have been deposited into borrower’s account, not deposited into borrower’s account, or if funds are being wired directly to the settlement agent.
- Large Deposits – USDA no longer addresses lump sum additions.
Category: 2021 Kentucky USDA Income and Property Guidelines
Kentucky Rural Housing Loan Program Update for 2021 Single Family Housing USDA Guaranteed Loan
Kentucky Rural Housing Loan Program Update for 2021 Single Family Housing USDA Guaranteed Loan
Kentucky USDA Rural Housing Streamline Refinance Guidelines
(with
•
Allows financing of
unpaid principal and
eligible costs subject
to available equity
Streamlined Refinance
(without
•
Allows financing of
unpaid principal
balance and upfront
guarantee fee along
with accrued interest
•
Debt ratios are
calculated
Streamlined
Assist
Refinance (no appraisal
effective 6/2/2016)
•
Allows financing of
unpaid principal
balance and eligible
costs
•
Debt ratios not
calculated
Streamline Refinance
•
A new appraisal is not required (unless the loan being refinanced is a Direct Loan and subsidy
recapture is required).
•
The new loan amount may not exceed the original loan amount of loan being refinanced.
•
The new loan is limited to:
•
The principal balance of the loan being refinanced
•
The upfront guarantee fee (if financed)
•
Accrued interest (current interest)
•
Reasonable and customary fee for reconveyance
•
Subsidy recapture due for Direct Loan borrowers may not be included in the new loan amount
•
A borrower may be removed from the loan as long as at least one original borrower remains on
the new loan.
•
All other rate/term refinance requirements, including debt ratio calculation and limits apply.
(Except as outlined above, all Rate/Term Refinance requirements also apply to Streamline Refinance. See the
HB 1 3555 for all three types of refinance transactions allowed.)
Streamlined
Assist Refinance (cont.)
•
The new loan amount is limited to:
•
The unpaid principal balance of the loan being refinanced
•
The upfront guarantee fee (if financed)
•
Accrued interest (current interest)
•
Eligible loan closing costs (not to exceed 2% of total loan amount)
•
Permissible bona fide discount points (not to exceed 2% of total loan amount).
•
Funds to establish an escrow account for real estate taxes and insurance.
•
Subsidy recapture due for Direct Loan borrowers may not be included in new loan amount; however,
the cost of any appraisal obtained for recapture purposes is an eligible closing cost and may be
included.
Note:
The maximum loan amount cannot exceed the balance of the loan being refinanced, plus the guarantee
fee and reasonable and customary closing costs (including funds necessary to establish a new tax and
insurance escrow account). Subordinate financing, such as home equity lines of credit and down payment
assistance “silent” seconds, cannot be included in the new loan amount. Unpaid fees, past due interest and
late fees/penalties due the servicer, cannot be included in the new loan amount.
(Except as outlined above, all Rate/Term Refinance requirements also apply to Streamline
Assist Refinance.)
Joel Lobb
Mortgage Loan OfficerIndividual NMLS ID #57916
American Mortgage Solutions, Inc.10602 Timberwood Circle Louisville, KY 40223Company NMLS ID #1364
click here for directions to our office
Text/call: 502-905-3708fax: 502-327-9119
email: kentuckyloan@gmail.com
https://www.mylouisvillekentuckymortgage.com/
USDA Loans in Kentucky
New Income limits for most counties (*) in Kentucky are $90,300 for a household family of four and household families of five or more can make up to $119,200.
With the new changes for 2020 USDA Income limits, the Jefferson County Louisville, KY Metro area (**) saw an increase of $90,300 for a family of four and up to $119,200 for a family of five or more. The metro area surrounding counties of Jefferson County includes Oldham, Bullitt, Spencer are included in these higher income limits for USDA loans.
Remember, the entire Jefferson County and Fayette County Kentucky counties are not eligible for USDA loans. Along with parts of the following counties Daviess (Owensboro), Mccracken (Paducah), Madison County, (Richmond), Clark County (Winchester), Warren (Bowling Green), Hardin (Fort Knox and Radcliff), Bullitt(Hillview, Maryville, Zoneton, Fairdale, Brooks), Franklin, (Frankfort), Henderson (Henderson City Limits), Christian County (Hopkinsville, Fort Campbell), Boyd County (Ashland city limits) and the most Northern Parts of Boone, Kenton, Campbell Counties of Northern Kentucky (Covington, Florence, Richwood, Hebron, Ludlow, Fort Thomas, Bellevue, Ryle, Beechwood, )
The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Brackenn, Gallatin, and Pendleton are $99,250 for a household of four or less and up to $131,000 for a family of five or more.
USDA Eligible Areas in Northern Kentucky
Burlington
Hebron
Independence
Walton
Alexandria
Highland Heights
Cold Springs
Grant County
Owen County
Pendleton County
Burlington
Hebron
Independence
Walton
Alexandria
Highland Heights
Cold Springs
Grant County
Owen County
Pendleton County
USDA Income Limits
Boone, Kenton & Campbell Counties (N. KY)
$99,250 (family size 1-4)
$131,000 (family size 5 or more)
Boone, Kenton & Campbell Counties (N. KY)
$99,250 (family size 1-4)
$131,000 (family size 5 or more)
Grant, Owen & Pendleton Counties (N. KY)
$90,300 (family size 1-4)
$119,250 (family size 5 or more)
Most are familiar with USDA Rural Housing Loan Program being a great no money down program available and it is not just for Kentucky first time buyers.
$90,300 (family size 1-4)
$119,250 (family size 5 or more)
Most are familiar with USDA Rural Housing Loan Program being a great no money down program available and it is not just for Kentucky first time buyers.
What is KY USDA Rural Development Guarantee in Kentucky?
Kentucky USDA Rural Development Guarantee USDA loans offer 100% financing options on home purchases in rural areas. Properties though can be located within city limits and in subdivisions depending on population density of that area.
The RDG loan program is primarily used to help low to moderate income individuals or households to purchase homes and the applicants need to be within 115% of the median income for the area. Most Kentucky Counties are 90,300 for a household family incomes of four or less, and up to $119,200 for a family of five or more in the household income
Some highlights of the are:
- 100% financing on purchases and 100% Zero Money Down
- Low 30 year fixed rates on all loans. They don’t offer any other terms or offer cash-out refinancing.
- A small Rural Housing monthly guarantee fee or sometimes called annual fee of .35% of the loan amount divide by 12 months to get total monthly mi payment.
- Upfront Rural Housing funding fee of 1% of the loan amount and is financed into new loan
- Minimum credit scores of 581, but helpful to have 640 and get an automated underwriting approval thru Rural Housing’s underwriting engine – GUS–GUS stands for the Guaranteed Underwriting System to pre-approval all Kentucky USDA loans.
- No rental verification needed with GUS approval if Approved Eligible Findings.
- Flexible trade line requirements with GUS approval with only 1 trade line needed on credit for 12 months
- No foreclosures in the last 36 months, but need explanation if < 36 months
- Bankruptcy discharged at least 36 months
For a Kentucky USDA Rural Housing property and income eligibility search, please click HERE.
Issues to avoid or be aware of with Rural Housing property search:
- Avoid homes in flood zones – RD is very restrictive for homes in flood zones
- Avoid homes with cisterns – they are extremely difficult to get financed
- Be aware that homes with wells and septic systems needed extra tests for contamination
- Avoid homes with any income producing activities such as working farms, detached buildings with offices or car lifts for auto repairs, or anything else related to income producing activities.
What Is The Mortgage Insurance Premium On A Kentucky Rural Housing USDA Loan?
When does PMI stop on Kentucky Rural Housing USDA Loans?
How Can I Get Rid of Mortgage Insurance for a Rural Housing Loan In Kentucky?
USDA’s Mortgage insurance is for the life of the loan
Mortgage insurance advantages & strategies for lower down payment and payment USDA has an annual fee which is similar to private monthly mortgage insurance premiums and an upfront guarantee fee paid to USDA at closing that is currently equal to 1% of the loan amount.
The annual fee is recalculated each year based on the new balance of the mortgage. The annual fee is currently only .35 which began October 1, 2016.
The annual fee percentage on USDA loans stays for the entire 30 year term but because it is based on the annual mortgage balance. Therefore, the dollar amount decreases each year.
How to calculate monthly mortgage insurance for Kentucky USDA loans:
Take Loan amount x 1.0101% (USDA funding fee) x .0035 / 12 = monthly
fee to include in the monthly mortgage payment.
So on a $100,000 sales price, going no money down, this would yield a total loan amount of $101,000 with a monthly mortgage insurance premium of $29.45 a month.
This is very cheap mortgage insurance when compared to an Kentucky FHA loan.
Rural Housing Requirements For USDA Loans In Kentucky
Kentucky Rural Housing Loans
Kentucky USDA loans are mortgages made by lenders and guaranteed by the U.S. Department of Agriculture. They are available to moderate- and low-income borrowers to build, rehabilitate, improve or relocate a primary residence in eligible rural and suburban areas. The income limit is 115 percent of the median income in your area. You can check the income limits for your area here.
It can be closed with zero down. USDA loans do have a monthly insurance requirement, but the upfront fee is significantly lower than on the VA loan and the mortgage premiums are lower than on the FHA loan.
The problem is that the number of buyers who qualify for a USDA loan is much smaller. Unlike on other loans where more income is better, a USDA loan has strict income maximums.
Fees for Kentucky USDA Loans
USDA loan borrowers pay an upfront fee of 1 percent of the loan amount, and this fee can be added to the loan balance. Borrowers also pay a mortgage insurance premium of 0.35 percent of the loan balance per year in 12 equal installments. This fee is based on the current balance and added to the monthly payment.
Down Payment Requirements for Kentucky USDA Loans
USDA loans are available with up to 100 percent financing (zero down).
Credit Score Required for Kentucky Rural Housing Loans
There is no minimum credit score for a USDA loan, but you are automatically ineligible if you are presently delinquent on a nontax federal debt.
Automated approval is available if you have two tradelines reported on your credit history and acredit score of 640 or higher.
If you do not have sufficient credit data, the underwriter can assess your creditworthiness other ways, such as by examining your history with rent payments. Applicants with a credit score lower than 640 will undergo additional underwriting steps.
Loan Limits for Kentucky USDA Loans
They are no loan limits for Kentucky USDA loans backed-up the guarantee loan program. The Direct USDA loan program does have loan limits.
|
Joel Lobb (NMLS#57916)
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
Text/call 502-905-3708
kentuckyloan@gmail.com
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
Text/call 502-905-3708
kentuckyloan@gmail.com
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
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. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/
— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. 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.
Kentucky Direct Single Family Housing Program
Loan Limit Change – Effective January 31, 2020
Homes financed under the program are generally 2,000 square feet or less.
Area Loan Limits
Single Family Housing Direct
The Direct Home Loan Program assists low- and very-low- income applicants obtain decent, safe, and sanitary housing in eligible rural areas. Funds can be used to purchase, build, repair, or renovate a home. Applicants must meet income eligibility for a direct loan. Please select South Dakota from the map that displays.
Generally, rural areas with a population less than 35,000 are eligible. Visit the USDA Income and Property Eligibility website for complete details.
Remember, Direct USDA Loan Limits aren’t effective for the USDA Rural Development Single Family Guartneed Program, whereas that program has no Loan Limits, just income limits on the household income.
County or Equivalent Limit Effective 01-31-2020 for the Direct USDA Loan Program
Adair $265,400
Allen $265,400
Anderson $265,400
Ballard $265,400
Barren $265,400
Bath $265,400
Bell $265,400
Boone $265,400
Bourbon $265,400
Boyd $265,400
Boyle $265,400
Bracken $265,400
Breathitt $265,400
Breckinridge $265,400
Bullitt $266,800
Butler $265,400
Caldwell $265,400
Calloway $265,400
Campbell $265,400
Carlisle $265,400
Carroll $265,400
Carter $265,400
Casey $265,400
Christian $265,400
Clark $265,400
Clay $265,400
Clinton $265,400
Crittenden $265,400
Cumberland $265,400
Daviess $265,400
Edmonson $265,400
Elliott $265,400
Estill $265,400
Fleming $265,400
Floyd $265,400
Franklin $265,400
Fulton $265,400
Gallatin $265,400
Garrard $265,400
Grant $265,400
Graves $265,400
Grayson $265,400
Green $265,400
Greenup $265,400
Hancock $265,40
County or Equivalent Limit Effective 01-31-2020
Hardin $265,400
Harlan $265,400
Harrison $265,400
Hart $265,400
Henderson $265,400
Henry $266,800
Hickman $265,400
Hopkins $265,400
Jackson $265,400
Jessamine $265,400
Johnson $265,400
Kenton $265,400
Knott $265,400
Knox $265,400
Larue $265,400
Laurel $265,400
Lawrence $265,400
Lee $265,400
Leslie $265,400
Letcher $265,400
Lewis $265,400
Lincoln $265,400
Livingston $265,400
Logan $265,400
Lyon $265,400
McCracken $265,400
McCreary $265,400
McLean $265,400
Madison $265,400
Magoffin $265,400
Marion $265,400
Marshall $265,400
Martin $265,400
Mason $265,400
Meade $265,400
Menifee $265,400
Mercer $265,400
Metcalfe $265,400
Monroe $265,400
Montgomery $265,400
Morgan $265,400
Muhlenberg $265,400
Nelson $265,400
Nicholas $265,400
Ohio $265,400
Oldham $266,800
Owen $265,400
County or Equivalent Limit Effective 01-31-2020
Owsley $265,400
Pendleton $265,400
Perry $265,400
Pike $265,400
Powell $265,400
Pulaski $265,400
Robertson $265,400
Rockcastle $265,400
Rowan $265,400
Russell $265,400
Scott $265,400
Shelby $266,800
Simpson $265,400
Spencer $266,800
Taylor $265,400
Todd $265,400
Trigg $265,400
Trimble $265,400
Union $265,400
Warren $265,400
Washington $265,400
Wayne $265,400
Webster $265,400
Whitley $265,400
Wolfe $265,400
Woodford $265,400
Kentucky Rural Housing USDA loan program
What are the eligibility requirements for a Kentucky USDA loan?
The Kentucky Rural Housing USDA loan program has certain eligibility requirements .
Must be located in a eligible USDA Rural Housing Area.
The home would be your primary residence, not a rental property
Household income requirements beginning around $86,850 for a family of four and up to $115,400 for a family of five or more
Clear Cavirs Numbers.
No minimum credit score requirement but most lenders that offer USDA loans will want a 620 credit score or higher
What are USDA loan fees in Kentucky for 2020?
There are two fees on a USDA loan. An upfront fee, called the Guarantee fee and the monthly annual fee.
The upfront guarantee fee for fiscal year 2020 is 1 percent of the loan amount. This fee can often be rolled into the mortgage, instead of paying it out of pocket. The annual fee for is .35 percent of the loan amount.
It’s important to check the maximum income limits for your family size and where you live to get the most accurate data.
Advantages of USDA Loans
Zero Down Payment
Low Credit Score Requirements
Can finance closing costs up to appraised value
Streamline refinance an existing USDA with less documentation
No max loan amount
Disadvantages of USDA Loans
only eligible in rural areas
Must be 3 years removed from bankruptcy or foreclosure
Limited to Income Requirements
Debt to income ratios tighter qualifying guidelines than FHA, Fannie Mae
Joel Lobb
Mortgage Loan Officer
Mortgage Loan Officer
Individual NMLS ID #57916
American Mortgage Solutions, Inc.
10602 Timberwood Circle
Text/call: 502-905-3708
email: kentuckyloan@gmail.com
Student Loan Changes to Kentucky Rural Housing Loans Approvals
RHS temporarily modified the calculation of non-fixed student loan payments for purposes of determining debt-to-income ratios. Per the modified requirements, lenders must now use the higher of .50% of the loan balance or the actual payment reflected on the credit report as the monthly payment (rather than 1% of the loan balance). The modified requirements went into effect September 23, 2019 and will be permanently incorporated into Chapter 11 of the Single Family Housing Loan Program Technical Handbook (HB-1-3555) in the near future.
BIG change announced for Kentucky Rural Housing USDA loans today regarding how minimum payments on your Student Loans are calculated. Reach out to see if you qualify for this awesome loan!
Have you or someone you know been turned down for a USDA loan recently because of student loans?
New guidelines effective today may allow you to qualify (or qualify for a little higher loan amount)
**This is not an offer for extension of credit or a commitment to lend. All loans must satisfy company underwriting guidelines. Information and pricing are subject to change at any time and without notice. Not all applicants will qualify for all loan products offered. This is not an offer to enter into a rate lock agreement under any applicable law. Not endorsed or part of USDA Federal Government Agency.
Kentucky USDA Rural Housing Repair and Grant Program.
Section 504 Repair Loan and Grant Program for Kentucky USDA RHS Loans
If you missed the live webinar to learn about recent changes to the Section 504 Single-Family Housing Repair Loan and Grant Program, the presentation slides from the webinar are available on the U.S. Department of Agriculture (USDA) Rural Development’s website. This information is for individuals and organizations, including nonprofits and public agencies, who work with affordable housing products such as weatherization, home repairs, and Section 504 application packaging.
The slides will provide information on the following:
- An overview of recent changes to the Section 504 Single-Family Housing Repair Loan and Grant Program.
- Information on Procedure Notice 527 (published on August 29, 2019).
For a brief overview of the 504 program, please watch the USDA Helps You Make Home Repairs
Program Guidelines & Terms –Section 504 Loans
• Maximum outstanding 504 loan amount is $20,000
• Interest rate is fixed at 1%
• Maximum term of 20 years (term and payment is based upon the
family budget)
• Appraisal and escrow account is required for loans over $15,000
• Flood insurance is required for properties located in a flood zone
• Mortgage, title work and closing agent required for loans of
$7,500 or more
• Mortgage is filed for loans of $7,500 and over
• Assets above $15,000 ($20,000 for elderly/disabled households)
must be applied toward repairs.
• Residential Mortgage Credit Reports are ordered by Agency for
loans of $7,500 and over (RMCR fee paid by Rural Development
General Eligibility Criteria – Section 504 Loans
• Household income must not exceed “very low” income
limits; < 50% HUD median income
• Applicant must own home (to include site when
considering manufactured housing) and occupy house on a
permanent basis
• Demonstrate repayment ability based upon a family budget
• Stable and dependable source of income
• Acceptable credit – reasonable ability and willingness to
meet debt obligations
• Meet asset limitations (15K non-elderly and $20K elderly*)
Program Guidelines & Terms –Section 504 Grant
• Maximum cumulative lifetime grant assistance is $7,500
• Grantee must sign Grant Agreement requiring occupancy
of home for 3 years
• No lien on property
• Repairs to remove health and safety hazards or to make the
home accessible and useable for household members with
disabilities.
General Eligibility Criteria – Section 504 Grants
• At least one applicant must be 62 years of age or older.
• Household income must not exceed “very low” income limits;
< 50% HUD median income
• Applicant must own home (to include site when considering
manufactured housing) and occupy house on a permanent basis
• Repairs must be necessary to remove health and safety hazards or
to make the home accessible and useable for household members
with disabilities.
• Must demonstrate a lack of repayment ability based upon a
household budget.
• Meet asset limitations (15K non-elderly and $20K elderly*)
• No outstanding federal judgments
SECTION 504 PROPERTY REQUIREMENTS
• Must be modest for the area; market value cannot be in
excess of USDA established area loan limit
• Property must be located in a designated rural area
• Must not have an in-ground swimming pool
• If the property has income producing land or structures, we
may use loan/grant funds as long as repairs are used for the
residential portion of the home.
• Mobile or manufactured homes must be on a permanent
foundation or be placed on a permanent foundation with
loan or grant funds.
For additional program Information, please visit the following USDA webpages:
USDA Rural Development Housing Program
- Kentucky USDA Increased Income Limits for 2019
- USDA Rural Development Housing Program
- Kentucky Rural Housing Development Mortgage Guide for 2019 USDA Loans
- Kentucky Rural Housing Development Mortgage Guide for 2019 USDA Loans
- USDA 100% – Rural Loans
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