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 views of my employer. Not all products or services mentioned on this site may fit all people
Homebuyer Benefits for Kentucky Rural Housing Lenders
• No down payment required.
• Buy existing, build new, or refinance current Rural Development loan.
• Finance eligible loan costs up to 100% of the appraised value plus the one-time
upfront guarantee fee.
• Eligible loan costs may include: purchase price, repairs, lenders fees, closing costs,
essential household equipment.
• 30-year fixed rate that is negotiated between the applicant and lender.
• No maximum purchase price limits.
• Gift and grant funds allowed.
• Normal purchase contract time.
Why is the Single Family Housing Guaranteed Loan Program a top financing option for homebuyers?
USDA loans offer many advantages such as…
• No down payment so they can keep reserves in the bank for future unexpected costs.
• USDA offers the option to buy existing, build new, or refinance a current Rural Development
loan.
• Borrowers can finance eligible loan costs up to 100% of the appraised value plus the one-time
upfront guarantee fee.
• Eligible loan costs may include: purchase price, repairs, lenders fees, closing costs, essential
household equipment.
• 30-year fixed rate that is negotiated between the applicant and lender.
• No maximum purchase price limits. Maximum loan amount is determined solely by the
applicant’s repayment ability.
• Gift and grant funds allowed.
• Normal purchase contract time. No need to extend the contract time. Rural Development
typically issues a Conditional Commitment to the lender within 2-3 business days of receiving a complete application
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.
Kentucky USDA loans are loans offered by the United States Department of Agriculture to those looking to buy homes in rural areas of Kentucky.
There are a few requirements and restrictions associated with this type of loan however, if you are afirst time home buyer in Kentucky with a limited income, no down payment and are looking to live in a rural part of Kentucky, this may be a good option for you to purchase a home going no money down and getting a 30 year fixed rate loan.
Income Requirements for USDA Loans in Kentucky
The Rural Housing USDA website provides an income eligibility calculatordepending on where you are looking for housing in the state of Kentucky. Because it is a nationally funded loan by the United States Government, the income restrictions will vary county-by-county but the loan recipient cannot make more than 115% of the median income for the area in which they are applying. There is also a chart you can consult that provides Kentucky USDA county income limits depending on the number of people in your home. Most Kentucky Counties will allow up to $90,200 for a household family of four or less, and up to $119,350 for a household of five. The Northern Kentucky Counties of Kenton, Bracken, Boone, Gallatin, Campbell allow for more. See Chart below
Households with 1-4 members have different limits as households with 5-8. Similarly, applicants living in high-cost counties will have a higher income limit than those living in counties with a more average cost of living.
Kentucky Score Requirements for a USDA Loan in Kentucky
Borrowers in Kentucky are required to have a FICO minimum credit score of 581 or higher. However, most USDA lenders will create a credit overlay where they will want a minimum credit score of 640 in order to get a GUS approval.
If the potential borrower has declared bankruptcy or foreclosure within the last 36 months, they would be ineligible for this type of loan.
If the mortgage was included in the Bankruptcy, sometimes the 36 month hold is ignored and you just have to make sure the property is out of your name before applying for a USDA loan
Can you get a USDA loan in Kentucky with a Previous Bankruptcy?
Chapter 7 bankruptcy, the bankruptcy must have been discharged at least 3 years prior to becoming eligible for a Kentucky USDA home loan.
Borrowers must be in a Chapter 13 bankruptcy for a minimum of 12 months, with documentation of 12 months of on time payments and a letter of authorization from the bankruptcy trustee authorizing you to enter into new debt.
In order to qualify for a USDA home loan after filing a Chapter 13 bankruptcy, additional documentation may be requested/required stating that the reason for the Chapter 13 filing was due to extenuating circumstances beyond the borrower’s control, temporary in nature and not likely to re-occur.
Home must be primary Residence.
Recipients must be U.S. Citizens, U.S. non-citizen nationals or Qualified Aliens to apply for this program. They must also agree to use the home as their primary residence and not as a rental property.
The property must be for a family including townhouses, single family homes, condominiums (FHA Approved), new construction or new mobile homes.
What areas of Kentucky Qualify for the USDA Loan Program?
The USDA provides a map of the where you can apply a USDA loans are eligible in Kentucky. The major metro areas of Jefferson County and Fayette County Kentucky are not eligible for Rural Housing Loans in Kentucky, along with some parts of Northern Kentucky next to Cincinnati; parts of Owensboro, Paducah, Bowling Green, Richmond, Frankfort, Winchester, Radcliff, Hopkinsville and Henderson Kentucky are not eligible.
If you have a property in mind, you can head over to the eligibility map to see if the home you are considering qualifies.
What are the advantages of USDA loans in Kentucky?
For many people in a low to middle-income bracket, saving for a down payment can be difficult. A USDA loan does not require the purchaser to put any money down toward the purchase price of a home. The government insures the loan in this case, should the borrower default, therefore the borrower is required to carry mortgage insurance during the life of the loan. The mortgage insurance for the USDA loan is provided at a more discounted rate than that required by traditional loans.
On USDA loans the mortgage insurance is 1% upfront, called a guarantee fee, and .35% monthly called an annual mortgage insurance fee to USDA. The beauty of USDA, is that it does not matter if you have a credit score of 640, or a credit score of 740, everyone pays the same premiums, unlike conventional loans.
They only offer 30 year fixed rates with no prepayment penalty, and usually the rates are very low and compare to FHA rates and much lower than conventional loans.
USDA loans take on average about 30 days to close, and the appraisal must meet FHA requirements. Home inspections are not required, and only new mobile homes are allowed on this home loan program.
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#57916 http://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.
What are Kentucky USDA Home Loans? Do I Qualify? Deciding between rural and suburban is one of many choices you’ll make along your homeownership journey. And if the countryside is your preference, then you may want to consider applying for a USDA loan. You’…
USDA Loans in Kentucky. Updated Qualifying Guidelines
What is Kentucky USDA Rural Development Guarantee?
Kentucky USDA Rural Development Guarantee USDA loans offer 100% financing options on home purchases in rural areas of Kentucky. Properties though can be located within city limits and in subdivisions depending on the population density of that particular County of Kentucky. Jefferson and Fayette Counties, the two largest counties of Kentucky are not eligible for Rural Development Loans.
Full Credit Guidelines below ….click on link for USDA Mortgage Credit Guidelines
Upfront Rural Housing funding fee of 1% of the loan amount and is financed into new loan
No Minimum credit scores but helpful to have 620 or higher with most USDA lenders with a 640 and get an automated underwriting approval thru Rural Housing’s underwriting engine – GUS-GUS Stands for the automated Underwriting system they use online to pre-approve you for a loan.
Each lender will set their own credit and debt to income criteria
No rental verification needed with GUS approval
No foreclosures in the last 36 months,
A bankruptcy discharged at least 36 months
For a USDA eligible areas in Kentucky, see the property and income eligibility search, please click HERE.
Things to look for in your Rural Housing property search in Kentucky below:
Avoid homes in flood zones – RD is very restrictive for homes in flood zones. They will do them in flood zones just watch out for the costly premiums.
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.
Manufactured homes or doublewides must be brand new. No used mobile homes are allowed.
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). Mortgage loans only offered in Kentucky.
Kentucky USDA Mortgage Lender for Rural Housing Loans 