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
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.
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.
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.
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.
A Kentucky USDA home loan is a zero-dollar-down mortgage option provided by USDA’s Department of Rural Development.
This government-backed loan program comes in two types: direct loan, which is reserved for lower-income households and issued by USDA, and the guaranteed loan, which is reserved for low- to moderate-income families. The guaranteed loan is funded by private lenders, and USDA guarantees a portion of the loan against default.
The KY USDA home loan program is generally more beneficial to rural families than a conventional lending program, particularly for first-time homebuyers with lower- to median-level incomes.
Some of the benefits of Kentucky Rural Housing USDA loans include: • zero down payment • competitive interest rates • lower-than-average monthly mortgage insurance • relaxed credit requirements versus conventional loans
• no loan limits
How do I determine eligibility for a Kentucky Rural Housing USDA loan? To be eligible for a USDA home loan, borrowers must meet the program’s basic eligibility requirements. These requirements are relaxed compared to other mortgage options and are in place to ensure borrowers can make their monthly mortgage payments.
Here are a few of the basic Kentucky RHS USDA eligibility requirements:
• Income. Applicants must not have annual adjusted income greater than 115% of the median household income for the area. Check your county’s USDA income limit. This called compliance income.
• Credit. USDA’s guaranteed underwriting credit requirements. However, most lenders will want a 620 or preferably to get an Automated Approval 640 is the magic number in most cases. With regards to bankruptcy, 3 years is usually the date needed to lapse since your discharge. They actually require no minimum score but no lenders that I know of will do a no score loan.
• Employment. Applicants must have proof of two years of stable income and employment.
: Income: They will take your gross monthly income and develop two ratios for you: The front end ratio, which is called your housing ratio, and then the back-end ratio or total debt ratio is the house payment plus the total monthly payments listed on the credit report. If you pay child support, this is included in the qualifying ratios but utility bills, car insurance, cell phone bills, water bills etc, is not included. Typically 28% is used for the housing ratio, and
Student Loans: They are pretty tough on student loans and qualifying with your current student loan debts. They will make us use 1% of your outstanding balance on student loans, so sometimes this will cause the loan to get denied because your debt to income ratio is too high. If they are in an Income-Based repayment plan they will still make us use the .5% balance so keep this in mind. For example, let’s say you owe $50k in outstanding student loans, and your IBR plan calls for a $50 monthly payment. RHS will make us use $250, not the $50 IBR payment so you can see where this will cause issue on higher debt to income ratios on some loans.**********
If you are a Kentucky USDA Mortgage applicant who has student loan calculations will be changed to the following Fixed Payment Loans:
A permanent amortized, fixed payment may be used when it can be documented that the payment is fixed, the interest rate is fixed, and the repayment term is fixed.
Non-Fixed Payment Loans (i.e. deferred, income based, graduated, adjustable, etc.): The payment should be calculated as the greater of 0.5% of the loan balance or the actual payment reflected on the credit report. No additional documentation is required.
• Property location. Homes must be located within a rural area, as defined by USDA. Rural areas are any that have a population less than 35,000 depending on the area’s designation. Use this tool from USDA to determine if a specific address is eligible.
• Physical property. Homes must be the borrower’s primary residence, have direct access to a street, and have adequate utilities and water and wastewater disposal, among other things No working fams allowed or properties that income producing livestock or crops.
For those with lower incomes, a USDA direct loan provides greater opportunities for lending, as its credit and income requirements are more lax than the guaranteed loan option.
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/
Criteria for USDA loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for three years or more, you are eligible to apply for an USDA mortgage. If you are in a Chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make an Kentucky USDA loan application.
An established credit history and credit score often stands between potential home or car buyers and their dream. But What is a good credit score? What exactly is a credit score? What makes a credit score “good?”How to improve your credit score? If you’re new to building credit there are a few things you need to know in order to keep your credit looking stellar.
What is a credit score?
Your credit score is a numerical representation of your credit report. This three-digit number is like a badge that predicts risk, credit responsibility and determines your interest rates if you borrow money from lenders much like your CLUE Report. While you will be able to get a copy of your credit report you may not find this numerical key listed. Think of your credit score like the cliff notes version of your credit report. There are a few different measures of credit scores between divisions. Based on their own systems different scorers might view certain numbers in many ways.
what is a good credit score
Deciphering your three-digit credit score is quite easy if you know the levels. The range usually runs from 300-850. Good to excellent credit is considered anything from 700 to 850. If your credit score falls in this range you’re going great! Fair credit runs from 625-699, poor runs from 550-624, and anything below 550 is bad. Some finance experts would classify anything over 720 a good credit rating. Experts will disagree depending on their preferred credit rating systems, and in most cases the criteria you use to determine whether or not your credit score is good will not be far off.
What Does a Good Credit Score Mean?
Having a good credit score is great, but if you don’t know how to use it you could be missing out on some crucial credit building. Credit scores are used in varying ways by lenders and banks. One thing your credit score implies is how likely you are to pay back debt. Basically it announces how reliable you are as a borrower. People with good credit scores are more likely to pay back funds that they borrow while those with lower scores aren’t so reliable. Lenders like reliable borrowers, and good credit points them out.
But a credit score does much more than predict whether or not you’ll pay a loan back. When it comes to buying a house or car, there is an interest charge. Higher credit scores usually have a lower interest rate than those with bad to fair credit. Lenders not only base whether or not they’ll approve a loan by your credit score, but also how much interest to charge. If your credit is in good standing your interest rate won’t be as high as someone with bad credit. Your credit score saves you money with lower interest rates.
How is a Credit Score Calculated?
In order to build and maintain good credit you must first know how your score is determined. Once you know what goes into a credit score you can begin building your credit or nursing your score towards higher digits. Credit scores are based on your financial history only, and laws prevent your score being affected by things like race, gender, age and where you live. What is included are items such as your payment history, your current credit debts, age of your credit history, new credit items added to your accounts and types of credit used.
These five basic areas are where the bulk of your credit score is formed. All criteria have varying degrees of involvement in your score. For example:
Payment history (35%) – How many on-time payments you’ve made, missed, defaulted and past due items
Current amount owed (30%) – How much you currently owe – if you owe a large amount this could negatively affect your score
Age of credit history (15%) – The average length of your credit accounts and time since last activity
New credit (10%) – The number of new credit items on your accounts
Types of credit (10%) – The kinds of credit accounts are you currently maintain
How to Improve Your Credit Score?
Many people avoid credit based on all the negatives they’ve heard against it, but neglecting your credit score hurts your chances of being able to make major purchases in the future. The best way to build credit is to use credit, and forming the following good credit habits early will pull your low score to higher ground.
Pay bills on time – This is the easiest and best way to boost your credit score. Since the bulk of your credit score comes from your payment history, paying bills on time will pull you up quickly. Not only will that help, but a recent and consistent history of paying bills on time overshadow a period long in the past where you may have missed payments.
Budget – Setting up a budget and staying within its parameters will keep you from overspending and using credit for frivolous things. Although using credit builds credit not being able to pay it off hurts more in the future.
Use all your credit cards regularly – If you have a few credit cards try to use them from time to time in order to show that you use all of your accounts. Remember that the last usage of an account is 15% of your score.
If you want to start repairing a bad credit history or start building yours, find out what your credit score is. I use Credit Karma to check mine, you can check out myreview of Credit Karmaor if want just apply here –www.creditkarma.com.
Making your way to a good credit score and keeping your score high won’t be a financial nightmare when you know how to build it and what it means financially.
This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency.
1) Kentucky USDA loans and rural housing underwriting is tightening up!You are going to see us asking for more to make sure we have it to respond to USDA when they ask for it. We don’t want to be caught shorthanded on these deals and be stuck waiting to get them closed (neither do you!) so to be reactive to the changes with USDA, you will find that we are conditioning for more than we used to. To help us be on the ball with your USDA loans, be sure to include the following:
1) 30 days most recent paystubs showing a YTD amount
2) VOE’s if the borrower is NOT employed in the same position for more than 2 years or the borrower has OT, Bonus or commission income. We will recommend Written VOE’s for the purpose of showing the borrower is in the same line of work!
3) Assets – if your 1003 shows bank information and asset information then you must provide the most recent 2 statements to prove this information
4) Collections & open judgments must show on your liabilities. Please provide an LOX for all Derogatory credit this LOX should show that the circumstances were temporary in nature, beyond the applicant’s control and resolved to the best of their ability
5) VOR‘s are required for all USDA loans. USDA has been consistently requesting this information in the past 30 days. For files above 640, a VOR will suffice. For files under 640, we will require 12 months cancelled checks. If a VOR is not available due to the borrower living with family, an LOX will be needed
6) Paystubs for all income in the household regardless if they are on the loan or not. Must be most recent and 30 days worth to help determine actual income
7) Garnishments or child support shown and if paying it we will require the court order. If receiving it, we need a 12 month history of receipt and court order
8) W-2’s for the past 2 years for ALL jobs
9) Tax returns if self employed or unreimbursed expenses are shown
10) YTD P&L if self employed prepared by tax preparer and signed by borrower.
11) 1980-21 signed by borrowers
12) Fully executed purchase contract
Remember – we cannot send a file to RD without an appraisal!!! The appraisal must state that the property meets HUD Handbooks 4150.2 and 4905.1.
2) Turn times for USDA in several states are extreme. We understand your frustration with the delays and want to express to you that we are watching diligently for return commitments to push your files to closing. If you could review your USDA loans with us and insure that all conditions are met….except for the CC…we can expedite these files ASAP when the commitment comes in. If your file has been with us for over 30 days, please update the paystubs as ours will have expired!!!
Thank you for your attention and please let me know if you need me!
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*
