USDA Rural Housing on or after October 1, 2020, will continue to require an upfront guarantee fee of 1 percent accompanied by an annual fee of 0.35 percent

Per the Fiscal Year 2021 Commitment Notice released September 14, 2020, funding for the USDA Rural Housing Loan Program will be temporarily unavailable beginning October 1, 2020.

Fiscal year 2021 begins October 1, 2020 and ends at the close of business September 30, 2021. The guaranteed loan program is not available for a brief period of time at the beginning of each fiscal year, and during the temporary lapse in funding, Rural Housing Development will issue Conditional Commitments “subject to the availability of commitment authority” for purchase and refinance
transactions.

As a reminder, all loans obligated by USDA Rural Housing on or after October 1, 2020, will continue to require an upfront guarantee fee of 1 percent accompanied by an annual fee of 0.35 percent, applicable to all Rural Housing transactions.

Mortgage Application Checklist of Documents Needed below  👇

W-2 forms (previous 2 years)
Paycheck stubs (last 30 days – most current)
Employer name and address (2 year history including any gaps)
Bank accounts statement (recent 2 months – all pages
Statements for 401(k)s, stocks and other investments (most recent)
federal tax returns (previous 2 years)
Residency history (2 year history)
Photo identification for applicant and co-applicant (valid Driver’s License

click on link for mortgage pre-approval

Joel Lobb (NMLS#57916)

Senior Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223

Company ID #1364 | MB73346

Text/call 502-905-3708

kentuckyloan@gmail.com

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/

NMLS Consumer Access for Joel Lobb

Accessibility for Website

Privacy Policy

Kentucky USDA Rural Housing Streamline Refinance Guidelines

KENTUCKY USDA MORTGAGE STREAMLINE REFIANCE

Kentucky USDA Rural Housing Mortgage Lender: Top 5 Reasons To Apply For A Kentucky  USDA Rural Housing Streamline Refinance
Rate/Term Refinance
(with

Allows financing of
unpaid principal and
eligible costs subject
to available equity
Streamlined Refinance
(without

Allows financing of
unpaid principal
balance and upfront
guarantee fee along
with accrued interest

Debt ratios are
calculated
Streamlined
Assist
Refinance (no appraisal
effective 6/2/2016)

Allows financing of
unpaid principal
balance and eligible
costs

Debt ratios not
calculated

Streamline Refinance

A new appraisal is not required (unless the loan being refinanced is a Direct Loan and subsidy
recapture is required).

The new loan amount may not exceed the original loan amount of loan being refinanced.

The new loan is limited to:

The principal balance of the loan being refinanced

The upfront guarantee fee (if financed)

Accrued interest (current interest)

Reasonable and customary fee for reconveyance

Subsidy recapture due for Direct Loan borrowers may not be included in the new loan amount

A borrower may be removed from the loan as long as at least one original borrower remains on
the new loan.

All other rate/term refinance requirements, including debt ratio calculation and limits apply.
(Except as outlined above, all Rate/Term Refinance requirements also apply to Streamline Refinance. See the
HB 1 3555 for all three types of refinance transactions allowed.)

Streamlined
Assist Refinance (cont.)

The new loan amount is limited to:

The unpaid principal balance of the loan being refinanced

The upfront guarantee fee (if financed)

Accrued interest (current interest)

Eligible loan closing costs (not to exceed 2% of total loan amount)

Permissible bona fide discount points (not to exceed 2% of total loan amount).

Funds to establish an escrow account for real estate taxes and insurance.

Subsidy recapture due for Direct Loan borrowers may not be included in new loan amount; however,
the cost of any appraisal obtained for recapture purposes is an eligible closing cost and may be
included.
Note:
The maximum loan amount cannot exceed the balance of the loan being refinanced, plus the guarantee
fee and reasonable and customary closing costs (including funds necessary to establish a new tax and
insurance escrow account). Subordinate financing, such as home equity lines of credit and down payment
assistance “silent” seconds, cannot be included in the new loan amount. Unpaid fees, past due interest and
late fees/penalties due the servicer, cannot be included in the new loan amount.
(Except as outlined above, all Rate/Term Refinance requirements also apply to Streamline
Assist Refinance.)

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

American Mortgage Solutions, Inc.10602 Timberwood Circle Louisville, KY 40223Company NMLS ID #1364
click here for directions to our office
Text/call:      502-905-3708fax:            502-327-9119
email:
          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

USDA Loans in Kentucky 

USDA Income Limits 2020 Help More Buy With No Down Payment USDA income limits 2020 increase allows more home buyers purchase a home with no down payment. Effective May 2020 through April 30, 2021, USDA guaranteed housing base income limits are as follows: $90,300 for 1 – 4 person households and a whopping $119,200 for 5 or more person households. Guys, that is not low income! So, we are talking about a majority of American households meeting this income limit. Therefore, first time buyers or repeat buyers have the ability to use an amazing product to purchase a home without down payment.

New Income limits for most counties (*) in Kentucky are $90,300 for a household family of four and household families of five or more  can make up to  $119,200.

With the new changes for 2020 USDA Income limits, the Jefferson County Louisville, KY Metro area (**) saw an increase of $90,300 for a family of four and up to $119,200 for a family of five or more. The metro area surrounding counties of Jefferson County includes Oldham, Bullitt, Spencer are included in these higher income limits for USDA loans.
Remember,  the entire  Jefferson County and Fayette County  Kentucky counties are not eligible for USDA loans. Along with parts of the following counties Daviess (Owensboro), Mccracken (Paducah), Madison County, (Richmond), Clark County (Winchester), Warren (Bowling Green), Hardin (Fort Knox and Radcliff), Bullitt(Hillview, Maryville, Zoneton, Fairdale, Brooks), Franklin, (Frankfort), Henderson (Henderson City Limits), Christian County (Hopkinsville, Fort Campbell), Boyd County (Ashland city limits) and the most Northern Parts of Boone, Kenton, Campbell Counties of Northern Kentucky (Covington, Florence, Richwood, Hebron, Ludlow, Fort Thomas, Bellevue, Ryle, Beechwood, )
The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Brackenn, Gallatin, and Pendleton are $99,250 for a household of four or less and up to $131,000 for a family of five or more.
USDA Eligible Areas in Northern Kentucky
Burlington
Hebron
Independence
Walton
Alexandria
Highland Heights
Cold Springs
Grant County
Owen County
Pendleton County
USDA Income Limits
Boone, Kenton & Campbell Counties (N. KY)

$99,250  (family size 1-4)
$131,000 (family size 5 or more)
Grant, Owen & Pendleton Counties (N. KY)

$90,300 (family size 1-4)
$119,250 (family size 5 or more)



Most are familiar with USDA Rural Housing Loan Program  being a great no money down program available and it is not just for Kentucky first time buyers.

 

 

 

 

 

 

What is KY USDA Rural Development Guarantee in Kentucky?

Kentucky USDA Rural Development Guarantee USDA loans offer 100% financing options on home purchases in rural areas.  Properties though can be located within city limits and in subdivisions depending on population density of that area.
The RDG loan program is primarily used to help low to moderate income individuals or households to purchase homes and the applicants need to be within 115% of the median income for the area. Most Kentucky Counties are 90,300  for a household family incomes of four or less, and up to $119,200 for a family of five or more in the household income
Some highlights of the are:
  • 100% financing on purchases and 100%  Zero Money Down
  • Low 30 year fixed rates on all loans. They don’t offer any other terms or offer cash-out refinancing.
  • A small Rural Housing monthly guarantee fee or sometimes called annual fee of .35% of the loan amount divide by 12 months to get total monthly mi payment.
  • Upfront Rural Housing funding fee of 1% of the loan amount and is financed into new loan
  • Minimum credit scores of 581, but helpful to have 640 and get an automated underwriting approval thru Rural Housing’s underwriting engine – GUS–GUS stands for the Guaranteed Underwriting System to pre-approval all Kentucky USDA loans.
  • No rental verification needed with GUS approval if Approved Eligible Findings.
  • Flexible trade line requirements with GUS approval with only 1 trade line needed on credit for 12 months
  • No foreclosures in the last 36 months, but need explanation if < 36 months
  • Bankruptcy discharged at least 36 months
For a Kentucky USDA Rural Housing  property and income eligibility searchplease click HERE.

Issues to avoid or be aware of with Rural Housing property search:

  • Avoid homes in flood zones – RD is very restrictive for homes in flood zones
  • 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.

What are the Requirements for a Kentucky USDA Loan in Kentucky in 2020?

KENTUCKY USDA Loans are issued by qualified lenders and are guaranteed by the United States Department of Agriculture. These are not farm loans! They are intended to encourage home ownership in rural areas as defined by the USDA in Kentucky.

Here’s a quick overview of KENTUCKY MORTGAGE USDA loans:

  • No down payment – a true 100% LTV Loan
  • Minimum credit score of 581. Just investors will create overlays and institute a higher minimum credit score-Be aware of this!~!!!
  • Borrowers that do not have a credit score may be eligible with additional requirements.
  • No Bankruptcies or forecloses in the last 3 years
  • Kentucky USDA Rural Housing has a Household income limits apply. Avg. limits throughout KENTUCKY are $90,300 for 1-4 people in the home, $119,200 for 5-8. Incremental increases to limits will apply for families with over 8 people.
  • Generally easier to qualify for than a Conventional mortgage and much cheaper mortgage insurance than FHA loans in Kentucky!
  • Property must be located in an eligible rural area as designated by map below
  • No maximum loan amount unlike FHA and Conventional loans.
  • Eligible Property Types:
    • 1 unit properties only
    • HUD Approved Condos
    • New Manufactured Homes (*There is currently a pilot program in KENTUCKY only that allows for existing homes built after Jan. 2006)

Contact us for an overview of the property eligibility boundaries specific to your area, or look up the eligibility of a specific address here: https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp

Want to learn more about KENTUCKY USDA loans? Let us know, we are here to help!

Watch Video Below👇👇👇👇

 

New Income limits for most counties (*) in Kentucky are $90,300 for a household family of four and household families of five or more  can make up to  $119,200.

With the new changes for 2020 USDA Income limits, the Jefferson County Louisville, KY Metro area (**) saw an increase of $90,300 for a family of four and up to $119,200 for a family of five or more. The metro area surrounding counties of Jefferson County includes Oldham, Bullitt, Spencer are included in these higher income limits for USDA loans.
Remember,  the entire  Jefferson County and Fayette County  Kentucky counties are not eligible for USDA loans. Along with parts of the following counties Daviess (Owensboro), Mccracken (Paducah), Madison County, (Richmond), Clark County (Winchester), Warren (Bowling Green), Hardin (Fort Knox and Radcliff), Bullitt(Hillview, Maryville, Zoneton, Fairdale, Brooks), Franklin, (Frankfort), Henderson (Henderson City Limits), Christian County (Hopkinsville, Fort Campbell), Boyd County (Ashland city limits) and the most Northern Parts of Boone, Kenton, Campbell Counties of Northern Kentucky (Covington, Florence, Richwood, Hebron, Ludlow, Fort Thomas, Bellevue, Ryle, Beechwood, )
The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Brackenn, Gallatin, and Pendleton are $99,250 for a household of four or less and up to $131,000 for a family of five or more.
USDA Eligible Areas in Northern Kentucky
Burlington
Hebron
Independence
Walton
Alexandria
Highland Heights
Cold Springs
Grant County
Owen County
Pendleton County
USDA Income Limits
Boone, Kenton & Campbell Counties (N. KY)

$99,250  (family size 1-4)
$131,000 (family size 5 or more)
Grant, Owen & Pendleton Counties (N. KY)

$90,300 (family size 1-4)
$119,250 (family size 5 or more)

 

Kentucky USDA Mortgage Loans Affected by COVID-19

Kentucky Rural Housing USDA Implements Immediate Measures to Help Rural Housing Loan Program  Affected by COVID-19

WASHINGTON, April 1, 2020 – USDA Rural Development has taken a number of immediate actions to help rural residents, businesses and communities affected by the COVID-19 outbreak. Rural Development will keep our customers, partners, and stakeholders continuously updated as more actions are taken to better serve rural America.

* Visit www.rd.usda.gov/coronavirus for information on Rural Development loan payment assistance, application deadline extensions, and more.

OPPORTUNITIES FOR IMMEDIATE RELIEF

Rural Development Guaranteed Loan Programs

Effective immediately until September 30, 2020, lenders may offer 180-day loan payment deferrals without prior agency approval for Business and Industry Loan Guarantees, Rural Energy for America Program Loan Guarantees, Community Facilities Loan Guarantees, and Water and Waste Disposal Loan Guarantees. For additional information, see page 17721 of the March 31, 2020, Federal Register.

Rural Housing Service

Single-Family Housing

Effective March 19, borrowers with USDA single-family housing Direct and Guaranteed loans are subject to a moratorium on foreclosure and eviction for a period of 60 days. This action applies to the initiation of foreclosures and evictions and to the completion of foreclosures and evictions in process.

Direct Loan Program:

• USDA has waived or relaxed certain parts of the application process for Single-Family Housing Direct Loans, including site assessments, and has extended the time period that certificates of eligibility are valid.

• A Direct Loan borrower who is experiencing a reduction of income by more than 10 percent can request a Payment Assistance package to see if he/she is eligible for payment assistance or for more assistance than currently received.

• Moratorium Assistance is available for Direct Loan borrowers experiencing medical bill expenses (not covered by insurance) or job loss because of COVID-19. Qualifying borrowers can receive a moratorium on house payments for a period of time, repaid at a later date.

• Direct Loan questions should be directed to USDA’s Customer Service Center at 800-414-1226 (7:00 a.m.-5:00 p.m. Eastern Time Monday-Friday) or https://www.rd.usda.gov/contact-us/loan-servicing. Call volume and wait times are high at this time.

Guaranteed Loan Program:

• Guaranteed Loan borrowers who are in default or facing imminent default due to a documented hardship can have payments reduced or suspended by their lender for a period not to exceed 12 months delinquency. Once the hardship is resolved, the lender can modify the loan to cure the delinquency or make up the missed payments based on the borrower’s individual circumstances.

•*USDA is granting lenders temporary exceptions pertaining to appraisals, repair inspections and income verification for the Single-Family Housing Guaranteed Loan Program (SFHGLP) due to theCOVID-19 pandemic. Effective immediately, the following exception sto Agency guidance found atHB-1-3555 are in effect for a period of 60-days.

*Residential Appraisal Reports–Existing DwellingFor purchase and non-streamlined refinance transactions, when an appraiser is unable to complete an interior inspection of an existing dwelling due to concerns associated with the COVID-19 pandemic, an “Exterior-Only Inspection Residential Appraisal Report”, (FHLMC 2055/FNMA 2055) will be accepted. In such cases, appraisers are not required to certify that the property meets HUD HB 4000.1 standards. The appraisal must be completed in accordance with the Uniform Standards of Professional Practice (USPAP) and the Uniform Appraisal Dataset (UAD).This exception is not applicable to new construction properties or construction-to-permanent loans. As a reminder, appraisals are not required for streamlined and streamlined-assist refinance transactions.

*Repair Inspections–Existing Dwelling: For loans for which a completion certification is not available due to issues related to the COVID-19 pandemic, a letter signed by the borrower confirming that the work was completed is permitted. Lenders must also provide further evidence of completion, which may include photographs of the completed work, paid invoices indicating completion, occupancy permits or other substantially similar documentation. All completion documentation must be retained in the loan file. This exception is not applicable to rehabilitation and repair loans noted in section 12.28 of HB-1-3555.

*Verbal Verification of Employment: Lenders must document and verify the borrower’s annual and repayment income in accordance with Agency regulations. Lenders should use due diligence in obtaining the most recent income documentation to re-verify the borrower’s repayment ability prior to closing. When the lender is unable to obtain a Verbal Verification of Employment(VVOE)within 10 business days of loan closing due to a temporary closure of the borrower’s employment, alternatives should be explored. For example, email correspondence with the borrower’s employer is an acceptable alternative to a VVOE. If the lender is unable to obtain a VVOE or acceptable alternative, the requirement will be waived when the borrower has a minimum of two months cash reserves. In the case of a reduction of income, the borrower’s reduced income must be sufficient to support the new loan payment and other non-housing obligations. Borrowers with no income at the time of closing are not eligible for SFHGLP loans regardless of available cash reserves.

Interest Rate Decrease for USDA Rural Housing Loans Direct Programs

SFH Direct Loan and Grant

Kentucky USDA Rural Housing Repair and Grant Program.

Section 504 Repair Loan and Grant Program for Kentucky USDA RHS Loans
If you missed the live webinar to learn about recent changes to the Section 504 Single-Family Housing Repair Loan and Grant Program, the presentation slides from the webinar are available on the U.S. Department of Agriculture  (USDA) Rural Development’s website. This information is for individuals and organizations, including nonprofits and public agencies, who work with affordable housing products such as weatherization, home repairs, and Section 504 application packaging.

The slides will provide information on the following:

  • An overview of recent changes to the Section 504 Single-Family Housing Repair Loan and Grant Program.
  • Information on Procedure Notice 527 (published on August 29, 2019).

For a brief overview of the 504 program, please watch the USDA Helps You Make Home Repairs

Program Guidelines & Terms –Section 504 Loans
• Maximum outstanding 504 loan amount is $20,000
• Interest rate is fixed at 1%
• Maximum term of 20 years (term and payment is based upon the
family budget)
• Appraisal and escrow account is required for loans over $15,000
• Flood insurance is required for properties located in a flood zone
• Mortgage, title work and closing agent required for loans of
$7,500 or more
• Mortgage is filed for loans of $7,500 and over
• Assets above $15,000 ($20,000 for elderly/disabled households)
must be applied toward repairs.
• Residential Mortgage Credit Reports are ordered by Agency for
loans of $7,500 and over (RMCR fee paid by Rural Development

General Eligibility Criteria – Section 504 Loans
• Household income must not exceed “very low” income
limits; < 50% HUD median income
• Applicant must own home (to include site when
considering manufactured housing) and occupy house on a
permanent basis
• Demonstrate repayment ability based upon a family budget
• Stable and dependable source of income
• Acceptable credit – reasonable ability and willingness to
meet debt obligations
• Meet asset limitations (15K non-elderly and $20K elderly*)

Program Guidelines & Terms –Section 504 Grant
• Maximum cumulative lifetime grant assistance is $7,500
• Grantee must sign Grant Agreement requiring occupancy
of home for 3 years
• No lien on property
• Repairs to remove health and safety hazards or to make the
home accessible and useable for household members with
disabilities.

General Eligibility Criteria – Section 504 Grants
• At least one applicant must be 62 years of age or older.
• Household income must not exceed “very low” income limits;
< 50% HUD median income
• Applicant must own home (to include site when considering
manufactured housing) and occupy house on a permanent basis
• Repairs must be necessary to remove health and safety hazards or
to make the home accessible and useable for household members
with disabilities.
• Must demonstrate a lack of repayment ability based upon a
household budget.
• Meet asset limitations (15K non-elderly and $20K elderly*)
• No outstanding federal judgments

SECTION 504 PROPERTY REQUIREMENTS
• Must be modest for the area; market value cannot be in
excess of USDA established area loan limit
• Property must be located in a designated rural area
• Must not have an in-ground swimming pool
• If the property has income producing land or structures, we
may use loan/grant funds as long as repairs are used for the
residential portion of the home.
• Mobile or manufactured homes must be on a permanent
foundation or be placed on a permanent foundation with
loan or grant funds.
For additional program Information, please visit the following USDA webpages:

USDA Rural Development Housing Program 

 

USDA Home Loan in Kentucky Compared to FHA loans in Kentucky.

Mortgage In "100% Financing Zero Down" Kentucky USDA Guaranteed Rural Housing Mortgage Guidelines In "100% Financing Zero Down"

Why use USDA financing for your next home purchase in Kentucky?

There are very few ways to purchase a home these days in Kentucky without a typical 3.5% down payment that is required for an FHA loans in Kentucky.  Many home buyers in Kentucky are surprised to find that a USDA Home Loan offers a lower payment than an FHA loan, even with NO DOWN PAYMENT!  “How can this be?” you ask.  The reason is because a Kentucky USDA home loan requires much lower MORTGAGE INSURANCE.

Kentucky FHA Loan vs. Kentucky USDA Loan Comparison

FHA USDA
$150,000 purchase price $150,000 purchase price
4.75% 30 year fixed rate 4.75% fixed rate
1.75% up front mortgage insurance (financed) 1.0% Guarantee Fee (financed)
  .85% month mi premium .35% monthly mi premium
$871.19 P&I monthly payment
with monthly mortgage insurance (not including taxes and insurance)
$826.86 P&I monthly payment (not including taxes and insurance
$5250.00 required down payment $0 down payment

A rural housing USDA loan saved this client $46.74 per month and they made NO DOWN PAYMENT!

Other benefits of Kentucky USDA Home Loans

  • Low up front closing costs
  • In some cases closing costs can be financed if home appraises for more than purchase price 
  • Minor credit problems OK with a minimum credit score of 581
  • No maximum loan amounts just household income limits based on which Kentucky County you are buying a home.
  • Fixed Rates Only for 30 years with no prepay penalty

A Kentucky USDA rural housing loan strive to find anyway possible to approve your loan, however there are some cases where a USDA Loan is not an option;

a previous bankruptcy must be discharged 3 years,

you must occupy the home being purchased as your primary residence,

the home may not be used for income producing purposes (farm, rental, etc.),

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Joel Lobb (NMLS#57916)
Senior  Loan Officer
 
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
 


Text/call 502-905-3708
kentuckyloan@gmail.com

 
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/

Gaps in Employment for KY USDA Rural Housing Loans

The rule states the following:
A borrower who has no verifiable employment for 6 months or longer is deemed to have a gap in employment. 
  •  Any gaps in employment must be analyzed in order to make a final determination of stable and dependable income. An employment gap does not automatically render an applicant ineligible. Applicants with job gaps due to maternity leave, medical leave, relocation, etc. are considered to have employment continuity. Applicants returning to the workforce after leaving a previous job to care for a child/family member, complete education, etc. will require a 12 month employment history.

 

 

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.