Category: Down Payment and Closing Costs Assistance

Kentucky Rural Housing Development Mortgage Guide for 2019 USDA Loans

Kentucky Rural Housing Development Mortgage Guide for 2019 USDA Loans

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

USDA Lenders Based in Kentucky Offering Rural Housing Mortgage loans.

2019 Kentucky Rural Development Mortgage Guide

  • 30 year fixed rate only for Purchases and Existing USDA loans Refinances.
  • Zero down Mortgage loan with no loan limits!
  • Upfront funding fee is 1.0% and annual mi fee is .35% (very low compared to FHA)
  • Typically cannot own other real estate. There are exceptions to this.
  • You do not have to be a first-time home buyer in Kentucky
  • Can refinance existing USDA loan as long as lowering rate by 1% and can do without an appraisal. There are overlays to this by lenders.
  • Closing costs and prepaids can be paid by seller but must be put into contract
  • Closing costs may be financed into the loan up to the appraised value.
  • You will need two credit trade lines reporting at least for 12 months on your credit file. They don’t have to be open and active. Just reporting on your credit report.
  • All Guaranteed Mortgage Loans are ran through GUS. GUS stands for the Guaranteed Underwriting System. USDA and their underwriters use this system to pre-approve you. They review credit score/history, income, debt to income ratio and assets to determine your loan eligibility. If your credit score is below 640 or your debt to income ratio is over 45%, it will get a refer and you will find most lenders will not approve the loan.
  • Some lenders will do a credit score down to 600, but they will want a lot of documentation to overturn the refer and compensating factors for the lower credit score. They typically will need to verify rent for last 12 months, with no lates, cash payments are not acceptable, and debt to income ratios are set at 29% and 41% respectively. Reserves are typically helpful too on lower credit scores, so keep in that in mind, if you have money in a savings account, for a rainy day fund, this will help sometimes get the loan approved.
  • If you have access to 20% down payment you cannot use the USDA Program. Money in a retirement account does not account toward the 20% rule.
  • Properties must be located in an eligible area of Kentucky. Typically the large metro areas of Kentucky including the following: all of Jefferson County,  all of Fayette County, Owensboro, Paducah, Hopkinsville, Bowling Green, Richmond, Frankfort and Northern KY cities of Covington, Florence, Erlanger, Beechwood, Richwood are not eligible
USDA Eligible Areas In Northern Kentucky for Boone, Kenton, Campbell, Grant Counties
  • Independence
  • Burlington
  • Hebron
  • Highland Heights
  • Walton
  • Alexandria
  • Cold Springs
  • All Of Grant County, Pendleton County And Owen County

Search for Kentucky USDA Eligible Properties 

A property must be located in an eligible area in order to use a USDA loan to purchase a home.  Contrary to belief, Rural Development loans are not only for farms or very rural homes.  

Actually, a property with an operating and income producing farm is not eligible for these loans!

2019 Kentucky USDA Rural Max Income Limits:

  • The total household income must be within the county limits for household size.  Typically a family household of 4 can make up to around $82,500  and a family of five or more  can make up to $109,500 for a household- Some KY counties allow for higher like Shelby County, and the Northern Kentucky Counties of Boone, Kenton, Campbell allow $90,000 (household income of four) up to $118,850  (household income of five or more)

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Kentucky Cincinnati (OH, KY, IN FMR) $90,050 $118,850
Shelby $86,450 $114,100
All Other Areas $82,700 $109,150

Check Your Kentucky County for USDA Rural Housing Income Limits

 

Some More Facts about a Kentucky USDA loan:


It’s a two step approval process.  The chosen USDA lender must first underwrite the file and get it approved based on the income, assets, and credit report submitted. Then, the lenders must submit to USDA for a “conditional commitment”.  This conditional commitment is the final loan approval paperwork you are looking for. 


Even though the lender may have approved the file, it still must go to USDA office in Lexington for an assignment to SFH underwriter for the final approval process. They typically are checking the appraisal and income at this stage. There have been instances where the lender would approve the file but USDA would not due to appraisal issues or income and job history. 
This is very rare instances, so keep that in mind when it comes to final loan approval. 

This two-step approval process usually adds 4-6 days to the final loan approval process, so keep that in mind when you are writing up your contract because it takes a little longer to close these loans vs FHA, VA, and Fannie Mae loans.

Well Test Treatments:  Properties with a well as the primary drinking source will require a well water test.  There are local labs to perform this test and the water must pass.

Septic Test: Sometimes they will require the septic tank to be inspected if called for in the appraisal report or home inspection. 

Older Homes: As a general rule, USDA does not like homes older than 100 years old. They will sometimes require a home inspection in addition to the mandatory appraisal on older homes.

USDA Loan After a Short Sale:  A short sale is not the end of the world.  So it is very possible to obtain a USDA loan if 3 years have passed after the short sale.  But a buyer would need re-established good rent and other credit history.

Bankruptcy and Foreclosure:  If the mortgage debt that was foreclosed, was included in a Bankruptcy – then the USDA Home Loan waiting periods after foreclosure “waiting period” of 3 years, starts from the date of the discharge of the Bankruptcy.  Because it can take 6 months or more for Banks to process the Foreclosure, and transfer title, this is a tremendous plus.

Put my experience of originating KY USDA loans to work for you. I have successfully originated over 200 Rural Housing Mortgage Loans in Kentucky. I offer free pre-approvals and will help you from start to finish and I usually attend all my closings in Kentucky. 

Get Qualified for a Kentucky USDA Loan Now!

 

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KENTUCKY USDA AND RURAL HOUSING MORTGAGE QUALIFYING GUIDELINES FOR 2016

Kentucky Rural Housing USDA Highlights for 2016

Kentucky USDA Rural Development Guaranteed Lending Program is geared to assist low to moderate income families realize home ownership. Below are some important highlights:

 USDA/Rural Development. The Annual Guarantee Fee is set to INCREASE October 1.
  • Debt Ratios–29/41% on manual underwrites  – max to 45% Debt to Income ratios with GUS Approve/Eligible Finding.
  • ZERO down payment – 100% LTV ok
  • Income Eligibility Limits do apply. Usually to $75k for a family of four and up to $98k for a household family of five or more.
  • Lender Credit from the interest rate may be used to pay closing costs.
  • Gifts ok! Usually not needed for USDA loans because 100% Financing offered. Gift funds cannot be used for reserves to get a GUS approval.
  • Applicants with > 20% of the sales price in assets (exclude retirement accounts) are not eligible for USDA financing.
  • Clear CAIVRS required – CAIVRS is a Federal Government-wide data base of information regarding individuals where an insurance claim or guarantee loss was paid.
  • 2 tradelines with > 12 months of repayment history – installment or revolving and trade lines may be open, closed or paid in full by applicant.
  • Student Loan Payments – important recent change to Kentucky Mortgage RHS USDA Loans. The change no longer allows for student loan payments that are IBR (Income Based Repayment), graduated, adjustable, interest only and deferred. USDA now requires a payment equal to 1% of the balance reflected on the applicant’s credit report.

Kentucky Rural Development USDA Changes Coming soon below: 

  • Kentucky USDA Streamlined-Assist refinances – similar to an FHA Kentucky Streamline…details coming soon!
  • Upfront Fee and the Annual Premiums will be reducing in the Fall of 2016 for a new Kentucky Rural Housing Mortgage Loans!

 

gs
Joel Lobb
Senior  Loan Officer
(NMLS#57916)
 Fax:     (502) 327-9119
 
 

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). USDA Mortgage loans only offered in Kentucky.

All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.

Down Payment and Closing Costs Assistance

Down Payment and Closing Costs Assistance.

 

Kentucky Housing recognizes that down payments, closing costs and prepaids are stumbling blocks for many potential home buyers. Here are several loan programs to help. Your KHC-approved lender can help you apply for the program that meets your needs.

Down Payment and Closing Costs Assistance

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Kentucky Housing recognizes that down payments, closing costs and prepaids are stumbling blocks for many potential home buyers. Here are several loan programs to help. Your KHC-approved lender can help you apply for the program that meets your needs.

Regular Down payment Assistance Program (DAP)

  • Purchase price up to $243,000.
  • Assistance in the form of a loan up to $4,000 in $100 increments.
  • Repayable over a seven-year term at 6 percent.  A DAP of $4,000 over 7 years at 6 percent interest would equal a payment of $58.44.
  • Available to all KHC first mortgage loan recipients who are first-time homebuyers in non-targeted counties and first and second-time homebuyers in targeted counties.

HOME-DAP

  • Purchase price up to $195,700.
  • Assistance up to $4,500
  • No monthly repayment; forgiven over five years.
  • Existing homes only.
  • Borrowers must meet HOME-income guidelines.

HOME Special Program

  • Purchase price up to $195,700.
  • Assistance up to $10,000
  • No monthly repayment; forgiven over five years.
  • Existing homes only.
  • Borrowers must meet HOME-income guidelines.
  • Eligible borrowers include:
    • Households that include a person with a permanent disability and who receives disability income (SSI, SSDI, Veterans Disability etc.).
    • Households where at least one of the home buyers is age 62 or older.

HOME Family Program

  • Purchase price up to $195,700.
  • Assistance up to $10,000
  • No monthly repayment; forgiven over five years.
  • Existing homes only.
  • Borrowers must meet HOME-income guidelines.
  • Eligible borrowers include:
    • Single- and two-parent households that have at least one dependent child under the age of 18 living in the household and that are first-time home buyers (have not owned a home or had an ownership interest in a home in the last 3 years).

More about down payment and closing costs

  • No liquid asset review and no limit on borrower reserves for Regular DAP.
  • Borrowers may retain two months’ house payments in reserve while using available funds first before looking for any form of HOME DAP assistance.
  • Specific credit underwriting standards may apply to down payment programs.