Can you get A Kentucky USDA Loan after  bankruptcy, foreclosure, or short sale?

Getting Approved for a Kentucky USDA Loan after bankruptcy, foreclosure, or short sale. 
Getting Approved for a Kentucky USDA Loan after bankruptcy, foreclosure, or short sale.


The Kentucky USDA Rural Loan program requires a minimum of three years from the date of a bankruptcy, foreclosure, or short sale to the borrower being eligible for a USDA Loan.  

For both Chapter 7 and Chapter 13 bankruptcies the borrower must allow three years from the discharge date prior to submitting a new loan request.

 If the bankruptcy included a property, whether a primary residence or investment property, the earliest a new loan can be obtained is based on USDA Loan short sale and foreclosure guidelines.

When the borrower experienced either a short sale, foreclosure, or surrenders the property through the bankruptcy process, there will be a three year waiting period between the date of property transfer from the borrower to a new entity, and the date the new loan application can be processed.  

The most conservative stance by a Kentucky USDA Loan Underwriter for defining the date of the negative occurrence is the legal recorded transfer date, which is the date the property has been transferred out of the borrowers name and either back to the bank that holds the mortgage note or a subsequent home buyer. From this date the borrower will not be eligible for a USDA Loan for a period of time no less than three years.

However, one of my investors will allow a Chapter 7 bankruptcy discharge date to be considered the date of foreclosure, provided the borrower didn’t re-affirm the mortgage liability.  This differs from when the property transfer date is recorded at the County Clerks Office. This is especially helpful in circumstances where the home owner legally removed their ownership rights to a property, through a Chapter 7 bankruptcy, but the mortgage lien holder was slow to transfer the mortgage back into the name of the bank or sell the property.

If the foreclosed property was secured by a government backed mortgage loan such as a FHA or VA Loan, the property transfer date is no longer considered relevant.  The date that now becomes important is the date when the mortgage lender that held the mortgage note received compensation for their mortgage insurance claim through either The Department of Housing and Urban Development for a FHA Loan or The Veterans Administration for a VA Loan.  

The date of the mortgage insurance claim is identified through a CAIVRS search, which is required on all Kentucky Rural Housing  USDA Loans.

If you have yet to apply for your Kentucky USDA Loan pre-qualification request, you can do so online by clicking here. If you have any Kentukcy USDA Loan or other loan specific questions please, email me at kentuckyloan@gmail.com or text/call 502-905-3708

USDA Rural Housing Lender for Kentucky

Foreclosure and Bankruptcy Guidelines for Kentucky Rural Housing Loans

 Foreclosure within 3 years:

 Including pre-foreclosure activity, such as a pre-foreclosure sale or short sale

in the previous 3 years (refer to Attachment 10-B for additional guidance);

 Bankruptcy within 3 years:

 Chapter 7 bankruptcy discharged in the previous 3 years;

 An elapsed period of less than 3 years, but not less than 12 months, may

be acceptable if the applicant meets the criteria of Section 10.8 of this

Chapter.

 Chapter 13 bankruptcy that has yet to complete repayment (repayment plan in

progress) or has completed payment in the most recent 12 months.

 Plans that are completed for 12 months or greater do not require a credit

exception in accordance with Section 10.8;

 Late mortgage payments if any mortgage trade line during the most recent 12

months shows 1 or more late payments of greater than 30 days

Collections Accounts for Rural Housing Loans in Kentucky

.

In an effort to minimize future risk of open collections left unpaid, the lender will

consider the following during the capacity analysis of the loan request, regardless of the

method utilized to underwrite:

1) Determine if the total outstanding balance of all collections accounts of all

applicants is equal to or greater than $2,000. Unless excluded by state law,

collection accounts of a non-purchasing spouse in a community property state are

included in the cumulative balance of all collections.

2) Remove all medical collections and all types of charge off accounts from the total

balance. Medical collections and charge off accounts must be clearly identifiable

on the credit report.

3) If the remaining outstanding balance of collection accounts are equal to or greater

than $2,000, any of the following actions will apply:

a. Payment in full of all collection accounts at or prior to closing.

b. Payment arrangements are made with each creditor for each collection

account remaining outstanding. A letter from the creditor or evidence on

the credit report is required to validate the payment arrangements. The

agreed upon monthly payment for each outstanding collection account

will be included in the borrower’s debt-to-income ratio.

c. In the absence of a payment arrangement, the lender will utilize in the

debt-to-income ratio a calculated monthly payment. For each collection
utilize 5% of the outstanding balance to represent the monthly payment.


http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu

Joel Lobb
Senior Loan Officer
(NMLS#57916
text or call my phone: (502) 905-3708
email me at kentuckyloan@gmail.com

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.

Single Family USDA Rural Housing Direct Loan and Grant Programs In Kentucky 2019 Shutdown Government

Source: Single Family Housing Direct Loan and Grant Programs

 

February 1, 2019

Single Family Housing Direct Loan and Grant Programs

We now have an enacted Fiscal Year (FY) 2019 continuing resolution that provides short-term funding for the U.S. Department of Agriculture (USDA), Rural Development. As we begin an orderly start-up of our loan and grant activities for FY 2019, we thank you for your patience and support during the period in which our services were unavailable.

 

We are taking a proactive and customer-focused approach to prioritizing our activities so that we can resume normal operations as quickly as possible. As Rural Development stakeholders, we will be working closely with you to achieve this goal.

 

On behalf of the USDA Single Family Housing Direct Programs, we appreciate your continued support and patience.

 

1.  Certificates of Eligibility: USDA will issue a new Certificate of Eligibility (COE) to all

applicants under the Single Family Housing Direct Loan Program who had a valid COE

on December 21, 2018. This includes any COE that was under an allowable extension on

this date. The new certificates, which will be issued by the field staff as soon as possible,

will allow the applicants additional time to locate a home within their qualification

amount and submit the needed documentation to the agency now that normal operations

have been resumed.

 

2 . Self-Help Housing: USDA staff are currently working on a 2019 Funding Plan for the

Section 523 Self-Help Housing Program pending full year appropriations. Operating

grantees may continue to work with eligible applicants, process applications, and resume

construction activities delayed by the lapse in funding. Technical & Management

Assistance (T&MA) Contractors are authorized to resume services as well.

 

3.  Repair Loans and Grants: Repair loan and grant funds are available for processing,

approval, and closings. Applicants with immediate health and safety hazards such as

inoperable heating systems will receive priority.

 

 4.  New 502 Direct Loans: Based on appropriations received thus far in Fiscal Year 2019,

which are applicable through February 15, 2019, USDA has had severely restricted levels

of funding available for new 502 Direct loans. USDA does not anticipate being able to

obligate new 502 Direct loans until the next Fiscal Year 2019 appropriation bill is passed.

 

Thank you for your support of the USDA Single Family Housing Direct Loan and Grant Programs. We look forward to serving you and the needs of rural communities.

 

Roger Glendenning
Deputy Administrator
Single Family Housing

 

For Program Information

Single Family Housing Direct Loans

Single Family Housing Repair Loans and Grants

Mutual Self Help Housing Technical Assistance Grants

Shutdown Stalling Rural Mortgages

Rural Housing Loans Affected By Government Shutdown in Kentucky

 

  • The USDA backs about 120,000 mortgages a year, or about 3.5 percent of purchase mortgage originations nationally.
  • Almost half of USDA mortgages were in southern states from 2012 to 2017.[1]

Borrowers who rely on mortgages from the U.S. Department of Agriculture (USDA) have been in a holding pattern that runs alongside the federal government shutdown. These loans from the USDA’s Farm Service Agency and the Rural Housing Service are made mostly in rural areas and often to low- and middle-income borrowers.

The USDA backs about 120,000 mortgages a year, or about 3.5 percent of all mortgage purchase originations,[2] according to data from the Home Mortgage Disclosure Act. The USDA offices that administer these loans have been closed since late December, rendering a major source of funding inaccessible.

49828816_1204712166358212_7429496701351624704_n (2)

Federal USDA home loans on hold during government shutdown

https://www.nbc4i.com/news/local-news/federal-usda-home-loans-on-hold-during-government-shutdown/1692968028Other federal loan programs such as VA and FHA mortgage loans have been unaffected by the partial shutdown.

Source: Federal USDA home loans on hold during government shutdown

Can you get a USDA Rural Housing loan with the Government Shutdown in 2019?

Government Shutdown of USDA Loans in Kentucky for 2019

USDA Rural Housing Loans in Kentucky Cannot Be Closed Currently!

The U.S. Department of Agriculture will not issue new Kentucky  USDA Direct Loans or Kentucky Guaranteed Loans 502. This is due to the ongoing shutdown by the Federal Government.

Kentucky FHA, VA, Fannie Mae, and KHC loans are being closed currently as of this writing.

Current Scheduled closings of  Kentucky Direct Rural Housing Loans are being canceled and unless your guarantee was previously issued for a Guaranteed Loan, those may or may not be closed, depending on the lender.

Check with your USDA lender immediately if you’re getting a USDA loan or had planned to use the program to buy a home; you might have to put off your purchase until the shutdown is resolved.

 

http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu

Joel Lobb
Mortgage L
oan Officer
Individual NMLS ID #57916
 
American Mortgage Solutions, Inc.
 

Text/call:      502-905-3708

fax:            502-327-9119
email:
          kentuckyloan@gmail.com
 
 

 

DIFFERENCES BETWEEN THE SECTION 502 GUARANTEED AND DIRECT LOAN PROGRAMS

 

There are several other Section 502 loan programs, but the only one that approaches the guaranteed program in number of loans made is the Homeownership Direct Loan Program

This program once accounted for almost all the Section 502 loans, but the number of guaranteed loans has greatly increased in the last few years. In Fiscal Year 2001, the guaranteed program obligated approximately $2.3
billion for 29,326 loans, while the direct program obligated approximately $1.07 billion for a total of 14,789 loans. The important differences between the Section 502 guaranteed and direct loan programs are as follows:

ƒ The lender for Section 502 guaranteed loans is a private savings and loan institution, bank, or mortgage company which also handles all the loan servicing. The lender for the direct program is the Rural Housing Service; Rural Development handles the servicing.

ƒ Income levels for Section 502 guaranteed borrowers are capped at 115 percent of the area median income. Income levels for the direct program must be no more than 80 percent of the AMI. ƒ Payment assistance subsidy is not available 
through the guaranteed program. Payment assistance, which can reduce the interest paid on the mortgage to as low as 1 percent, is available for borrowers in the direct program and is based on the borrower’s income as a percent of AMI.
ƒ Borrower protections differ between the programs. Applicants for guaranteed loans do not have the rights of moratorium or of appeal that accompany the direct program. Also, in the case of default, Section 502 guaranteed loans are liquidated by
the commercial lender, while direct loans are liquidated by the government

 

 

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