I am a Kentucky based USDA Mortgage Lender that has originated over 200 KY Rural Housing Mortgage Loans in Kentucky, Put my expert advice to use. Kentucky Rural Development RHS loans give KY Rural Homebuyers a zero down mortgage loan with a low 30 year fixed rate loan. A Local Kentucky Rural Housing Mortgage Lender offering same day free approvals and credit report. This website is not affiliated with USDA or any other government agency. NMLS#57916 Equal Housing Lender Text or call today 502-905-3708 with your mortgage questions about USDA Rural Housing Loans in Kentucky. Free Pre-Approvals on most applications within the same day. Kentuckyloan@gmail.com NMLS# 57916 Joel Lobb Loan Originator, American Mortgage Solutions NMLS ID. 1364 Equal Housing Lender
2-1 and 1-0 buydowns for Kentucky Rural Housing USDA RD loans Interest Rates.
2-1 and 1-0 buydowns for Kentucky Rural Housing USDA RD loans Interest Rates.
What are Buydowns for Kentucky USDA RD Loans?
The Kentucky Rural Housing USDA Buydown Program provides simple financing options that lowers the interest rate on a mortgage for either 1 year (1-0) or 2 years (2-1), before it rises to the regular permanent rate. Specifics2-1, and 1-0 temporary interest rate buydowns are allowed on 30 year fixed-rate mortgages for principal residences, purchase only. Not permitted on refinance transactions.The seller or agent may provide funds for the temporary interest rate buydown, subject to standard interested party contribution limits.Lender paid buydowns are not offered.The borrower is qualified at the note rate fully amortized (not the buydown rate)Minimum credit score for loans with buydown is 620
Have Questions or Need Expert Advice? Text, email, or call me below:
Joel Lobb Mortgage Loan Officer Individual NMLS ID #57916
American Mortgage Solutions, Inc. 10602 Timberwood Circle Louisville, KY 40223 Company NMLS ID #1364
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).
2023 Kentucky USDA Underwriting Guideline Mortgage Changes for Income, Credit, Work History and Assets
Rural Development Kentucky Underwriting Guideline Mortgage Changes for Income, Credit, Work History and Assets
Chapter 9 – Income Analysis
Paragraph 9.3 is being revised as follows: o To clarify that lenders must verify the income of each adult household member for the previous 2 years, which is consistent with the requirements in 7 CFR 3555. o To clarify under “full income documentation”, the lender must obtain W-2s or IRS Wage and Income transcripts, in addition to paystubs. o To change the term “streamlined documentation” to “alternative income documentation” to remove confusion with the streamlined refinance product. o To clarify under “self-employed income documentation” that if ownership interest is less than 25%, neither the “Business Owner” or “Self-Employed” options should be selected in GUS. o To clarify the Verbal Verification of Employment must be obtained within 10 business days of loan closing and confirmation a self-employment business remains operational must be obtained within 30 days of loan closing, which may differ than the note date that is currently referenced.
Paragraph 9.8 is being revised to clarify it is the lender’s responsibility to review gaps in employment and determine if the income is stable and dependable. In addition, this paragraph is being revised to clarify a business loss from a closed business may be removed from consideration under the same circumstances that self-employment income from a closed business can be removed from consideration.
Attachment 9-A is being revised as follows: o Revising “Automobile Allowance” and “Expense Allowance” guidance to allow the full expense allowance to be included as repayment income and the full debt counted in DTI, as well as updating the required history to two years. o To clarify that “Boarder Income” refers to rental income received from an individual renting space inside the dwelling, making the property income producing and therefore ineligible. o Revising “Bonus” and “Overtime” income to clarify the one year history must be in the same or similar line of work. o Revising the “Child Support” and “Separate Maintenance/Alimony” guidelines to simplify the guidance, remove inconsistencies within the current guidance, and clarify that income that meets the minimum history, but the payment amounts are not consistent, must use an average consistent with the payor’s current ability/willingness to pay for repayment income. o To clarify that employer-provided fringe benefits that are reported as taxable income may be included in repayment income. o Simplifying the guidance on considering mileage deductions, referring to IRS guidance when a mileage deduction is claimed on income tax returns.
USDA is an equal opportunity provider, employer, and lender. o Removing the requirement to obtain a copy of the IRS W-4 document when using a Mortgage Credit Certificate as income. o Revising “Secondary Employment” guidance to clarify that the applicant must have a one year history of working the primary and secondary jobs concurrently to be considered for repayment income. o Revising “Section 8 Housing Vouchers” to permit Section 8 vouchers to be treated as a reduction of the PITI when the benefit is paid directly to the servicer, rather than solely an addition to repayment income. Subsequently, provided clarification that a manual file submission is required in this instance and clarified that when lenders use the benefit as a reduction of the PITI, they must maintain documentation in their permanent loan file to support the benefit is paid directly to the servicer. o Revising the “Unreimbursed Employee or Business Expenses” guidance to reflect instances where the IRS continues to allow these deductions. o Adding categories providing guidance on Guardianship/Conservatorship Income, Individual Retirement Account (IRA) Distributions, and Variable Income. o Revising guidance for sourcing deposits in depository accounts to simplify the process and become more consistent with the lending industry. Clarified that all recurring deposits, as well as non-recurring deposits greater than $1,000, need to be reviewed to confirm the deposits are not from undisclosed income sources. o To clarify that gift funds applied as Earnest Money should not be entered on the “Loan and Property Information” GUS application page. o Adding a category providing guidance on “Lump Sum Additions.” o To clarify in the “Retirement” section that funds borrowed against retirement accounts (e.g. 401(k), IRA, etc.) are eligible for funds to close, but are not considered in reserves.
Attachment 9-E is being revised to reflect a two year required history for “Capital Gain or Loss” to be consistent with the current guidance in Attachment 9-A.
Chapter 15 – Submitting the Application Package
Attachment 15-A is being revised as follows: o Removing the requirement to submit evidence of qualified alien requirements on page 1, as it is not required to be submitted to the Agency on GUS Accept files. o To change the term “streamlined documentation” to “alternative income documentation” on page 2, to remove confusion with the streamlined refinance product. o Rent is required for manually underwritten loans less than 680.
Have Questions or Need Expert Advice? Text, email, or call me below:
Joel Lobb Mortgage Loan Officer Individual NMLS ID #57916
American Mortgage Solutions, Inc. 10602 Timberwood Circle Louisville, KY 40223 Company NMLS ID #1364
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).
Closing Cost Opportunities Roll Closing Costs into Mortgage and seller can pay for your closing costs and prepaids or if home appraises for more, can lump in the costs to higher appraised value.
Kentucky USDA Loan Eligibility Requirements
As with any loan, you must meet certain requirements to confirm USDA loan eligibility. To be an eligible candidate for a USDA loan, consider these general requirements:
Be a legal U.S. resident. Show two years of income history. Demonstrate a willingness to repay the loan as proven by no late payments or collections within the prior 12 months. Have an acceptable debt ratio. Possess an adjusted annual income of no more than 115% above the median income for the area as related to family size. Be interested in a property in an area certified by USDA loan agreements.
Frequently Asked Questions
What’s a government-backed mortgage?
These mortgage loans are insured by an agency of the federal government, protecting the lender in the event a borrower can’t repay the debt. This significantly reduces the risk to the lender and may make it easier for borrowers to take out a loan by offering more lenient credit guidelines, interest rates, and down payment options.
What’s the difference between Kentucky USDA loans and other types of government-backed mortgage loans like Kentucky FHA loans?
While both are government-backed mortgages, Kentucky USDA loans are run by a different government agency than Kentucky FHA loans and has different application, underwriting, appraisal, lending amount, and mortgage insurance requirements. To be eligible for a Kentucky Rural Housing USDA loan, borrowers must be purchasing or refinancing property in rural areas that the USDA has defined as eligible.
Do I have to be a farmer or rancher to get a Rural Kentucky USDA loan?
No, despite what the name implies. As long as you meet the property and eligibility qualifications for a Rural Kentucky USDA loan, you can apply.
How do I know if a home is eligible for a USDA loan?
Are there maximum lending amounts for KY Rural Development USDA mortgage loans?
There are no set loan limits for USDA loans in Kentucky, but the maximum amount is set based on your ability to qualify for a USDA loan based on borrower’s income and work history over the last two years. and debt to income ratios. The max back-end debt ratio on USDA loans is set at 45.9% of a borrower’s gross monthly income while the front-end debt ratio centers around 28% to32% depending on credit score, ratios, assets.
Do USDA loans require private mortgage insurance (PMI)?
Yes, Kentucky USDA mortgage loans have an upfront funding fee of 1% currently with a monthly mortgage insurance premium of .35%– mortgage insurance is required by the USDA and pays your lender if you default on your loan.
What’s a USDA guarantee fee and annual fee?
These are fees involved during the USDA home loan process. The upfront guarantee fee is normally equal to 1% of the loan amount. It’s usually added to the initial loan amount and paid at closing. The annual fee is normally equal to 0.35% of the loan amount and some is financed into your loan.
💥👇
Have Questions or Need Expert Advice? Text, email, or call me below:
Joel Lobb Mortgage Loan Officer Individual NMLS ID #57916
American Mortgage Solutions, Inc. 10602 Timberwood Circle Louisville, KY 40223 Company NMLS ID #1364
Quick Guide to Kentucky USDA Rural Development Loans Approval Requirements
Quick Guide to USDA Rural Development Loans
Not every community qualifies—but if it does, it’s the best thing since sliced bread!
Check your listings to see if the property location qualifies. http://eligibility.sc.egov.usda.gov. Generous household income limits also apply, and you can check them out at this link as well.
Generate phone calls by letting everyone know 100% financing is still available for eligible properties and borrowers.
Add an additional note to the listing info and mention it in your ads.
Buyer Qualifications Highlights
• No down payment required, and zero move-in cost is possible.
• 30-year fixed rate loan.
• 6% seller contribution limit allowed.
• Lender closing cost contribution by premium pricing allowed. Does not count against 6% seller limit.
• 100% Loan up to appraisal allowed plus you can add the 1.00% Guarantee Fee on top of that.
• Low .35% Annual Fee included in monthly payment.
• Finance closing costs & prepaids if appraisal Is higher than sales contract.
• No stated maximum loan amount; maximum loan based on repayment ability.
• No cash contribution required from borrower.
• No pre-payment penalty
• Liberal income limits (by county)
• Gift funds and grants allowed.
• No cash reserve requirements.
Property Qualification Highlights
• Existing Home
• New Construction
• New Manufactured Homes (Existing MH allowed under test program in 22 states)
• Previously occupied manufactured homes…unless refinancing existing Agency loan or home built on or after 2006 and in the certain states (22 test states).
—
Joel Lobb Mortgage Loan OfficerIndividual NMLS ID #57916