Kentucky Rural Housing Development Mortgage Guide for USDA Loans

Kentucky USDA Rural Housing Mortgage Lender

 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!


 Kentucky USDA Rural Max Income Limits:

  • New Income limits for most counties (*) in Kentucky are $103,200 for a  4 unit household and household families of five or more + can make up to  $136,000.
  • The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Bracken, Gallatin, and Pendleton are $109,500 for a household of four or less and up to $145,400 for a family of five or more.

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.

RHS Student Loans
Effective immediately for all RHS loans, 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.

As a reminder, annual income differs from repayment income. Annual income for the household will be used to calculate the adjusted annual household income to determine eligibility for a USDA-guaranteed loan. The main purpose of the following revisions in paragraph 9.3 is to ensure that lenders are aware that they are to calculate and properly document all adult household members’ income for annual income eligibility purposes…not just parties to the loan note.

It’s important to be aware of income sources that are counted and NOT counted as well as how to properly determine both “annual” and “repayment” income. I recommend that you thoroughly read Chapter 9 and refer to Attachment 9-A and Attachment 9-D in HB-1-3555 to review income and asset types, guidance for annual and repayment purposes, and documentation options acceptable to verify the income or asset source.

Paragraph 9.3 is being revised as follows:

  • To clarify that lenders must verify the income of each adult household member for the previous 2 years.
  • To clarify, under “full income documentation”, the lender must obtain W-2s or IRS Wage and Income transcripts in addition to paystubs.
  • To change the term “streamlined documentation” to “alternative income documentation” to remove confusion with the streamlined refinance product.
  • To clarify under “self-employed income documentation,” if ownership interest is less than 25%, neither the “Business Owner” nor “Self-Employed” options should be selected in GUS (Guaranteed Underwriting System).
  • To clarify the Verbal Verification of Employment must be obtained within 10 business days of loan closing, and confirmation a self-employment business remains operational must be obtained within 30 days of loan closing.
  • Restructured guidance on tax transcripts to emphasize a failure to timely file tax returns is not an eligible explanation to forgo obtaining tax transcripts.

Paragraph 9.8: STABLE AND DEPENDABLE INCOME

Gaps In Employment: The Agency clarifies that it is the lender’s responsibility to analyze any gaps in employment to make a final determination of stable and dependable income. The Agency does not impose specific criteria regarding when a gap in employment is acceptable. It is the approved lender’s responsibility to analyze the complete employment history to determine stable and dependable income.

Business loss from a closed business:

The Agency clarifies that any loss incurred by a self-employed business (full-time or part-time) that is closed may be removed from consideration when the applicant provides a letter of explanation and documentation to the lender which details:

  • When the business was closed;
  • Why the business was closed;
  • How the business was closed; and
  • Evidence satisfactory to the lender to support the closure of the business.

Attachment 9-A: INCOME AND DOCUMENTATION MATRIX

Considerations for Income Calculations: The Agency added additional considerations to the “Considerations for All Income Calculations” section of the matrix to provide important reminders to lenders regarding reviewing and calculating income. The full text of the revision is as follows:

  • Annual and adjusted annual income calculations must include all eligible income sources from all adult household members, not just parties to the loan note.
  • Annual income is calculated for the ensuing 12 months based on income verifications, documentation, and household composition.
  • Include only the first $480 of earned income from adult full-time students who are not the applicant, co-applicant, or spouse of an applicant in annual and adjusted annual income.
  • Income from assets that meet the criteria of Section 9.4 must be included in annual and adjusted annual income.
  • Repayment income calculations include the income sources of the applicants who will be parties to the note that meet the minimum required history identified in this matrix and have been determined to be stable and dependable income by the approved lender.
  • Income used in repayment income calculations must be confirmed to continue a minimum of three years into the mortgage. If the income is tax-exempt, it may be grossed up to 25 percent for repayment income. “Documentation Source Options” lists eligible documentation. Every item listed is not required unless otherwise stated. Lenders must obtain and maintain documentation in the loan file supporting the lender’s income calculations.

Automobile Allowance: Revised “Automobile Allowance” guidance to allow the full allowance to be included as repayment income and the full expense (debt) counted in DTI, as well as updating the required history to two years.

Comment: Previously, a 1-year history was required. The wording in this section is much better in that it clarifies the intent of the agency to allow for the automobile allowance to be counted as income and the debt associated with that income, if any (such as a car payment), counted in the DTI.  

Boarder Income: The Agency clarified that “Boarder Income” refers to rental income received from an individual renting space inside the dwelling, making the property income-producing and, therefore, ineligible.

Comment: This revision to attachment 9-A, “Boarder Income,” makes it clear that boarder income will render the property ineligible for a guaranteed loan. The previous guidance made it somewhat appear as if boarder income was acceptable. It’s not.

Bonus Income: Revised “Bonus” income to clarify the one-year history must be in the same or similar line of work.

Comment: This is a significant revision in that previously, the guidance made it appear the income had to be on the same job…not the same or similar line of work. This gives the lender greater flexibility in counting this type of income.

Child Support: Revised the “Child Support” guidelines to simplify the guidance and remove inconsistencies. The Agency stated that child support that meets the minimum history but the payment amounts are not consistent must use an average consistent with the payor’s current ability/willingness to pay.

Comment: While perhaps not readily apparent, the wording in this revised guidance is significant in that it gives lenders greater latitude in using “Child Support” income. 

Employee Fringe Benefits: The Agency clarified that employer-provided fringe benefits that are reported as taxable income may be included in repayment income. The actual guidance states the following: Employer-provided fringe benefit packages documented on earning statements as taxable income may be included.

Expense AllowanceRevised “Expense Allowance” guidance to allow the full allowance to be included as repayment income and the full expense (debt) counted in DTI, as well as updating the required history to two years.

Comment: Previously, a 1-year history was required. The wording in this section is much better in that it clarifies the intent of the agency to allow for the expense to be counted as income and the debt associated with that income, if any, counted in the DTI.  

Guardianship/Conservatorship Income: The Agency added a category providing guidance on “Guardianship/Conservatorship Income.” This guidance does not apply to income earned from foster care. Include amounts that will be received in the ensuing 12 months. Exclusions may apply under 7 CFR 3555.152(b)(5).

Required History: None; the income must be received at the time of submission to the Agency. Lenders must document:

  • The applicant is currently receiving the income; and
  • The amount of income received each month.

Continuance: Benefits that do not include expiration dates on the documentation will be presumed to continue.

Documentation Source Options:

  • Documentation to support payment amounts and duration, such as a court order, legal documents, or other supplemental information
  • Online payment schedule from the Agency, bank statements, etc.
  • Federal income tax returns or IRS tax transcripts with all schedules.

Individual Retirement Account (IRA) Distributions: The Agency added a category providing guidance on “Individual Retirement Account (IRA) Income.” Include amounts that will be received in the ensuing 12 months.  Lump sum withdrawals or sporadic payments may be excluded under 7 CFR 3555.152(b)(5).

Required History:  None; the income must be received at the time of submission to the agency. The lender must document:

  • The applicant is currently receiving the income; and
  • The amount of income received each month.

Documentation Source Options:

  • IRA documents, IRS 1099, evidence of current receipt, bank statements, etc.
  • Federal income tax returns or IRS tax transcripts with all schedules.

Mileage: The Agency is simplifying the guidance on considering mileage income and deductions. For deductions claimed on tax returns, the Agency now refers to IRS guidance when a mileage deduction is claimed on income tax returns.

Mortgage Credit Certificate: The Agency removed the requirement to obtain a copy of the IRS W-4 document when an applicant uses a Mortgage Credit Certificate as income.

Comment: THANK GOODNESS!!! This was one of the biggest pains ever. No other agency required evidence that a new W4 form was filed with the employer in order to use a Mortgage Credit Certificate as additional income. This is a common-sense welcome revision.

Non-Occupant Borrower: The Agency removed the “Non-Occupant Borrower” category on the matrix since non-occupant borrowers are not permitted anyway.

Overtime: Revised “Overtime” income to clarify the one-year history must be in the same or similar line of work.

Comment: This is a significant revision in that previously, the guidance made it appear the income had to be on the same job…not the same or similar line of work. This gives the lender greater flexibility in counting this type of income.

Rental Income: Updated “Rental Income” guidelines regarding corresponding mortgage liabilities to be consistent with the guidance in Chapter 11.

Secondary Employment: Revised “Secondary Employment” guidance to clarify that the applicant must have a one-year history of working the primary and secondary jobs concurrently for the lender to be able to consider the secondary employment for repayment income.

Section 8 Housing Vouchers: Revised “Section 8 Housing Vouchers” to permit Section 8 vouchers to be treated as a reduction of the PITI when the benefit is paid directly to the servicer rather than solely an addition to repayment income. Subsequently, the Agency provided clarification that a manual file submission is required in this instance, and clarified that when lenders use the benefit as a reduction of the PITI, they must maintain documentation in their permanent loan file to support the benefit is paid directly to the servicer.

Comment: Wow! I cannot stress how significant this change is. Allowing for the Section 8 Voucher amount paid directly to the servicer to be a direct reduction to PITI instead of counted as additional income will help a tremendous amount of applicants obtain an agency-guaranteed loan.

Separate Maintenance/Alimony: Revised the “Separate Maintenance/Alimony” guidelines to simplify the guidance and remove inconsistencies. The Agency stated that “Separate Maintenance/Alimony” that meets the minimum history, but the payment amounts are not consistent, must use an average consistent with the payor’s current ability/willingness to pay.

Comment: While perhaps not readily apparent, the wording in this revised guidance is significant in that it gives lenders greater latitude in using “Separate Maintenance/Alimony” income.

Unreimbursed Employee or Business Expenses: Revised the “Unreimbursed Employee or Business Expenses” guidance to reflect instances where the IRS continues to allow these deductions.

Variable Income: The Agency added a category providing guidance on “Variable Income.” i.e., piece rate, union work, and other similar types of pay structures.

Annual Income:  Include amounts that will be received in the ensuing 12 months.  Exclusions may apply under 7 CFR 3555.152(b)(5).

Repayment Income:

Required History:  One year in the same or similar line of work.  Underwriters must analyze variable income earnings for the current pay period and YTD earnings.  Significant variances (increase or decrease) of 20 percent or greater in income from the previous 12 months must be analyzed and documented (i.e., variances due to seasonal/holiday, etc.) before considering the income stable and dependable.

Continuance:  Income will be presumed to continue unless there is documented evidence the income will cease.

Required Documentation:

  • Paystub(s), Earning Statement(s)
  • W-2s
  • Written VOE or Electronic Verifications
  • Federal Income Tax Returns or IRS Tax Transcripts with all Schedules
  • Section 9.3E provides additional information on employment verification options.

Assets and Reserves: In the “Assets and Reserves” portion of the matrix, the Agency reiterated that lenders have the option to underwrite to the most conservative approach, with no consideration of assets entered into GUS. The full wording of the text is as follows: “Although all household assets must be verified and documented in the permanent loan file, the lender may underwrite to the most conservative approach with no consideration of assets entered into GUS.”

Comment: the agency has always said Lenders must use caution and not overstate assets utilized for reserves. It’s good practice not to overstate assets, as that could lead to a GUS finding that will ultimately be determined to be in error. The bottom line, excess assets utilized for reserves can lead to a Gus “Accept” finding that could potentially move to a “Refer” finding with the corrected entry of borrower assets. Don’t fall into the trap of overstating assets/reserves.  

Depository Accounts: Checking, Money Market Accounts, and Savings: The Agency revised guidance for sourcing deposits in depository accounts. I’m going to start off by simply providing a clip of the exact wording for this revision.

Documentation:

Two months of recent bank statements; or

  • Verification of Deposit (VOD) and a recent bank statement; or
  • Alternate evidence (i.e., statement printouts stamped by the lender) to support account activity and monthly balances.
  • Investigate all recurring deposits on the account statements that are not attributed to wages or earnings to confirm the deposits are not from undisclosed income sources.  There is no tolerance or percentage of the amount of a recurring deposit that is not required to be investigated.
  • Investigate individual (non-recurring) deposits greater than $1,000 on the account statements that are not attributed to wages or earnings to confirm the deposits are not from undisclosed income sources.
  • If the source of a deposit is readily identifiable on the account statement(s), such as a direct deposit from an employer, the Social Security Administration, an IRS or state income tax refund, or a transfer of funds between verified accounts, and the source of the deposit is printed on the statement, the lender does not need to obtain further explanation or documentation.  However, if the source of the deposit is printed on the statement, but the lender still has questions as to the source of the deposit, the lender should obtain additional documentation.

Reserves:  Eligible

Lenders must use the lesser of the current month’s balance or the previous month’s ending balance when calculating reserves.  Deposited gift funds require further documentation and calculation.  Refer to the “Gift Funds” section of the attachment for further guidance.

Funds to Close:  Eligible

Comment: Holy cow! It’s about time. I’ve been preaching for years that this guidance needed to be revised. I’m literally dancing with joy along with every mortgage processor and underwriter. Previously a lender had to investigate all deposits on the account statements that were not attributed to wages or earnings. Since a USDA Guaranteed Housing loan has income eligibility limits, the Agency wanted lenders to confirm that deposits were not from undisclosed income sources. They gave us no tolerance or percentage of the deposit amount that was not required to be investigated. This means that lenders were required to have the borrower’s address/document every single non-payroll deposit…no matter how small… even deposits as little as $1. In a world of cash payment apps such as Zelle, Venmo , and PayPal, where a borrower can have numerous cash deposits, this became a daunting task. In other words…it really sucked.

This revision, while still requiring analysis and possible explanation/documentation, will give us some well-deserved relief.

Under the new guidance, lenders now have to investigate all “RECURRING” deposits on the account statements that are not attributed to wage and earnings to confirm that the deposits are not from undisclosed income sources. As before, the agency has provided no tolerance or percentage of the amount of a recurring deposit that is not required to be investigated. The key here is the word “recurring”. When analyzing the account statements, a lender now has to simply address “recurring” deposits. This will simplify the analysis and process tremendously.

As for “NON-RECURRING” deposits…the Agency requires lenders to investigate individual “non-recurring” deposits greater than $1,000 on the account statements that are not attributed to wages or earnings to confirm the deposits are not from undisclosed income sources.

They go on to say that if the source of a deposit is readily identifiable on the account statement(s), such as a direct deposit from an employer, the Social Security Administration, an IRS or state income tax refund, or a transfer of funds between verified accounts, and the source of the deposit is printed on the statement, the lender does not need to obtain further explanation or documentation. However, if the source of the deposit is printed on the statement, but the lender still has questions as to the source of the deposit, the lender should obtain additional documentation.

Bottom line, this will make all our lives much easier. Thank goodness! God bless USDA.

Gift Funds: The Agency revised additional guidance for Gift Funds as follows:

Documentation:

  • Gift funds are considered the applicant’s own funds; therefore, excess gift funds are eligible to be returned to the applicant at loan closing.
  • Gift funds may not be contributed from any source that has an interest in the sale of the property (seller, builder, real estate agent, etc.).
  • Gift Funds must be properly sourced.
    • If the funds have been deposited to the borrower’s account, obtain a gift letter to state the funds do not have to be repaid and a bank statement as evidence of funds from the donor’s account.  Cash on hand is not an acceptable explanation for the source of funds.
    • If the funds have not been deposited in the borrower’s account, obtain a gift letter to state the funds do not have to be repaid, a certified check, money order, or wire transfer, and a bank statement showing the withdrawal from the donor’s account.  Cash on hand is not an acceptable explanation for the source of funds.
    • If the gift funds will be sent directly to the settlement agent, the lender must obtain a gift letter to state the funds do not need to be repaid, a bank statement as evidence of funds from the donor’s account, and verification that the funds have been received by the settlement agent. Cash on hand is not an acceptable explanation for the source of funds.

Reserves:  Ineligible

Funds to Close:  Eligible

GUS Instructions: • Gift funds should be entered in the “Gifts or Grants You Have Been Given or Will Receive for This Loan” section of the “Loan and Property Information” GUS application page. If the funds have already been deposited into an asset account, select “deposited” and include the amount of the gift in the applicable asset account on the “Assets and Liabilities” GUS application page. If the funds have not been deposited into an asset account, select “not deposited” and do not include the gift in an asset account on the “Assets and Liabilities” GUS application page. • Gift funds applied as Earnest Money should not be reflected in the “Gifts or Grants You Have Been Given or Will Receive for This Loan” section of the “Loan and Property Information” GUS application page.

Comment: You need to read this one thoroughly. This is much better guidance than previously provided, offering details for sourcing gift funds as well as how to enter gift funds into the Agency’s Guaranteed Underwriting System (GUS).

Lump Sum Additions: IRS Refunds, Lottery Winnings, Inheritances, Withdrawals from Retirement AccountsThe Agency added a category providing guidance on “Lump Sum Additions.”

Documentation:

  • Document the applicant’s receipt of funds.
  • Verify where the proceeds are held and confirm they are available to the applicant.
  • One-time deposits may not require annual income considerations under 7 CFR 3555.152(b)(5)(vi).
  • Do not enter into GUS separately if it is already included in the borrower’s depository account.

Reserves:  Eligible

Funds to Close:  Eligible

Comment:  Note that it says that withdrawals from retirement accountsare eligible as cash reserves; however, under the “Retirement: 401(k), IRA, etc.” section of the matrix, the Agency says that funds borrowed on retirement accounts are NOT allowed for cash reserves. To be clear, apparently, the term withdrawal does not include borrowing funds from the retirement account. In order to be able to use 401(k) funds as cash reserves, a borrower would have to either withdraw funds from the retirement account (not borrow) or leave the money in the retirement account so that 60% of the vested amount available to the borrower could be counted as cash reserves.

Retirement: 401(k), IRA, etc.: The Agency clarified that funds borrowed against retirement accounts (e.g., 401(k), IRA, etc.) are eligible for funds to close but are not considered in reserves.

Documentation:

  • Recent account statement (monthly, quarterly, etc.) to evidence the account balance, vested balance available for withdrawal, and early withdrawal penalty, if applicable.
  • Funds borrowed against these accounts may be used for funds to close but are not considered in reserves.  The borrowed funds should not be reflected in the balance of any asset entered on the “Assets and Liabilities” application page.

Reserves:  Eligible

  • 60% of the vested amount available to the applicant may be used as reserves.
  • Funds borrowed against these accounts are not eligible for reserves.  The borrowed funds should not be reflected in the balance of any asset entered on the “Assets and Liabilities” application page.

Funds to Close:  Eligible

Comment: I personally think this guidance is kind of weird. I can use 60 % of a vested 401(k), IRA, etc., as cash reserves, but if I borrow against it and put the cash into the bank, I can’t use any of those borrowed retirement funds beyond the amount of cash needed to close as cash reverse? Maybe it’s just me…but that does not totally make sense to me…but it’s their call.

Strategically, if you need cash to close from your retirement account and you need cash reserves, then you would need to only borrow just enough cash to close and leave the remaining funds in your retirement account, so it could be classified as cash reserves once the proper percentages (less the amount borrowed) are calculated.

Attachment 9-E: Information for Analyzing Tax Returns for Self-Employed Applicants

Attachment 9-E was revised to reflect a two-year required history for “Capital Gain or Loss” to be consistent with the current guidance in Attachment 9-A.

Chapter 15 – Submitting the Application Package

The following updates were made to HB-1-3555, Chapter 15 to make minor grammatical and formatting changes, correct discrepancies, and provide clarification for easier understanding of guidance.

Paragraph 15.7 C: Requesting Changes in Conditions: The Agencyclarifies that Conditional Commitment change requests should be made via email.

Attachment 15-A was REVISED as follows:

  • In Lender Instructions, the Agency states that electronic delivery to Rural Development is the preferred method for submission.
  • The Agency removed the requirement to submit evidence of qualified alien requirements on page 1, as it is not required to be submitted to the Agency on GUS Accept files.
  • The Agency changed the term “streamlined documentation” to “alternative income documentation” on page 2 to remove confusion with the streamlined refinance product.
  • The Agency clarified that a Verification of Rent is required for manually underwritten loans with credit scores less than 680.

Comment: Previously, the “Loan Origination Checklist” attachment 15-A stated that verification of rent “MAY” be applicable for a manually underwritten loan with a credit score of less than 680. Now the Agency states that it “IS” required for a credit score of less than 680 on a mainly underwritten loan.

 

Kentucky USDA Underwriting Guideline Mortgage Changes for Income, Credit, Work History and Assets

2023 Kentucky USDA Underwriting Guideline Mortgage Changes for Income, Credit, Work History and Assets

Rural Development Kentucky Underwriting Guideline Mortgage Changes for Income, Credit, Work History and Assets

Chapter 9 – Income Analysis

  • Paragraph 9.3 is being revised as follows:
    o To clarify that lenders must verify the income of each adult household member for the previous 2
    years, which is consistent with the requirements in 7 CFR 3555.
    o To clarify under “full income documentation”, the lender must obtain W-2s or IRS Wage and Income
    transcripts, in addition to paystubs.
    o To change the term “streamlined documentation” to “alternative income documentation” to remove
    confusion with the streamlined refinance product.
    o To clarify under “self-employed income documentation” that if ownership interest is less than
    25%, neither the “Business Owner” or “Self-Employed” options should be selected in GUS.
    o To clarify the Verbal Verification of Employment must be obtained within 10 business days of loan
    closing and confirmation a self-employment business remains operational must be obtained within 30
    days of loan closing, which may differ than the note date that is currently referenced.
  • Paragraph 9.8 is being revised to clarify it is the lender’s responsibility to review gaps in
    employment and determine if the income is stable and dependable. In addition, this paragraph is
    being revised to clarify a business loss from a closed business may be removed from consideration
    under the same circumstances that self-employment income from a closed business can be removed from
    consideration.
  • Attachment 9-A is being revised as follows:
    o Revising “Automobile Allowance” and “Expense Allowance” guidance to allow the full expense
    allowance to be included as repayment income and the full debt counted in DTI, as well as updating
    the required history to two years.
    o To clarify that “Boarder Income” refers to rental income received from an individual renting
    space inside the dwelling, making the property income producing and therefore ineligible.
    o Revising “Bonus” and “Overtime” income to clarify the one year history must be in the same or
    similar line of work.
    o Revising the “Child Support” and “Separate Maintenance/Alimony” guidelines to simplify the
    guidance, remove inconsistencies within the current guidance, and clarify that income that meets
    the minimum history, but the payment amounts are not consistent, must use an average consistent
    with the payor’s
    current ability/willingness to pay for repayment income.
    o To clarify that employer-provided fringe benefits that are reported as taxable income may be
    included in repayment income.
    o Simplifying the guidance on considering mileage deductions, referring to IRS guidance when a
    mileage deduction is claimed on income tax returns.

USDA is an equal opportunity provider, employer, and lender.
o Removing the requirement to obtain a copy of the IRS W-4 document when using a Mortgage Credit
Certificate as income.
o Revising “Secondary Employment” guidance to clarify that the applicant must have a one year
history of working the primary and secondary jobs concurrently to be considered for repayment
income.
o Revising “Section 8 Housing Vouchers” to permit Section 8 vouchers to be treated as a reduction
of the PITI when the benefit is paid directly to the servicer, rather than solely an addition to
repayment income. Subsequently, provided clarification that a manual file submission is required in
this instance and clarified that when lenders use the benefit as a reduction of the PITI, they must
maintain documentation in their permanent loan file to support the benefit is paid directly to the
servicer.
o Revising the “Unreimbursed Employee or Business Expenses” guidance to reflect instances where the
IRS continues to allow these deductions.
o Adding categories providing guidance on Guardianship/Conservatorship Income, Individual
Retirement Account (IRA) Distributions, and Variable Income.
o Revising guidance for sourcing deposits in depository accounts to simplify the process and become
more consistent with the lending industry. Clarified that all recurring deposits, as well as
non-recurring deposits greater than $1,000, need to be reviewed to confirm the deposits are not
from undisclosed income
sources.
o To clarify that gift funds applied as Earnest Money should not be entered on the “Loan and
Property Information” GUS application page.
o Adding a category providing guidance on “Lump Sum Additions.”
o To clarify in the “Retirement” section that funds borrowed against retirement accounts (e.g.
401(k), IRA, etc.) are eligible for funds to close, but are not considered in reserves.

  • Attachment 9-E is being revised to reflect a two year required history for “Capital Gain or
    Loss” to be consistent with the current guidance in Attachment 9-A.

Chapter 15 – Submitting the Application Package

  • Attachment 15-A is being revised as follows:
    o Removing the requirement to submit evidence of qualified alien requirements on page 1, as it is
    not required to be submitted to the Agency on GUS Accept files.
    o To change the term “streamlined documentation” to “alternative income documentation” on page 2,
    to remove confusion with the streamlined refinance product.
    o Rent is required for manually underwritten loans less than 680.




Have Questions or Need Expert Advice? Text, email, or call me below:

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708
fax: 502-327-9119
email:
 kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.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 approvalnor 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).

$0 Down, 100% Financing for Kentucky USDA Rural Housing Loans

$0 Down, 100% Financing for Kentucky USDA Rural Housing Loans

 

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Out of Pocket Costs
$0 Down, 100% Financing for Kentucky USDA Rural Housing Loans

 

single or multi-family home icon

Home Qualifications
Single & Multi-Family Rural Homes and Condos that meet FHA Guidelines or Fannie Mae Guidelines

low interest icon

Competitive Interest Rates
Often Lower than Conventional Loans with lower mortgage insurance requirements than FHA and Fannie Mae.

 

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Flexible Credit Guidelines
640 Credit Score Requirement* Can go lower possibly if the loan meets credit and debt to income ratio requirements. 

 

*Scores below 640 may be eligible via manual underwriting. 

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Eligibility
USDA Defined Rural & Suburban Areas See may below for approved areas in Kentucky for USDA loans. 👇 click on link

https://kentuckyruralhousingusdaloan.blogspot.com/p/usda-property-eligibility-text.html

closing costs icon

Closing Cost Opportunities
Roll Closing Costs into Mortgage and seller can pay for your closing costs and prepaids or if home appraises for more, can lump in the costs to higher appraised value. 



Kentucky USDA Loan Eligibility Requirements


As with any loan, you must meet certain requirements to confirm USDA loan eligibility. To be an eligible candidate for a USDA loan, consider these general requirements:

Be a legal U.S. resident.
Show two years of income history.
Demonstrate a willingness to repay the loan as proven by no late payments or collections within the prior 12 months.
Have an acceptable debt ratio.
Possess an adjusted annual income of no more than 115% above the median income for the area as related to family size.
Be interested in a property in an area certified by USDA loan agreements.


Frequently Asked Questions

What’s a government-backed mortgage?

These mortgage loans are insured by an agency of the federal government, protecting the lender in the event a borrower can’t repay the debt. This significantly reduces the risk to the lender and may make it easier for borrowers to take out a loan by offering more lenient credit guidelines, interest rates, and down payment options.

What’s the difference between Kentucky USDA loans and other types of government-backed mortgage loans like Kentucky FHA loans?

While both are government-backed mortgages, Kentucky USDA loans are run by a different government agency than Kentucky FHA loans and has different application, underwriting, appraisal, lending amount, and mortgage insurance requirements. To be eligible for a Kentucky Rural Housing USDA loan, borrowers must be purchasing or refinancing property in rural areas that the USDA has defined as eligible.

Do I have to be a farmer or rancher to get a Rural Kentucky USDA loan?

No, despite what the name implies. As long as you meet the property and eligibility qualifications for a Rural Kentucky USDA loan, you can apply.

How do I know if a home is eligible for a USDA loan?

You can navigate to the link here👉  Rural Development Kentucky USDA’s eligibility website and type in the exact address of the home you want to purchase to find out if it’s in an approved area.

Are there maximum lending amounts for KY Rural Development USDA mortgage loans?

There are no set loan limits for USDA loans in Kentucky, but the maximum amount is set based on your ability to qualify for a USDA loan based on borrower’s income and work history over the last two years. and debt to income ratios. The max back-end debt ratio on USDA loans is set at 45.9% of a borrower’s gross monthly income while the front-end debt ratio centers around 28% to32% depending on credit score, ratios, assets. 

Do USDA loans require private mortgage insurance (PMI)?

Yes, Kentucky USDA mortgage loans have an upfront funding fee of 1% currently with a monthly mortgage insurance premium of .35%– mortgage insurance is required by the USDA and pays your lender if you default on your loan.

What’s a USDA guarantee fee and annual fee?

These are fees involved during the USDA home loan process. The upfront guarantee fee is normally equal to 1% of the loan amount. It’s usually added to the initial loan amount and paid at closing. The annual fee is normally equal to 0.35% of the loan amount and some is financed into your loan.

 
💥👇


Have Questions or Need Expert Advice? Text, email, or call me below:

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708
fax: 502-327-9119
email:
 kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

Quick Guide to Kentucky USDA Rural Development Loans Approval Requirements

Quick Guide to Kentucky USDA Rural Development Loans Approval Requirements

Quick Guide to USDA Rural Development Loans
Not every community qualifies—but if it does, it’s the best thing since sliced bread!
Check your listings to see if the property location qualifies. http://eligibility.sc.egov.usda.gov. Generous household income limits also apply, and you can check them out at this link as well.
Generate phone calls by letting everyone know 100% financing is still available for eligible properties and borrowers.
Add an additional note to the listing info and mention it in your ads.
Buyer Qualifications Highlights
• No down payment required, and zero move-in cost is possible.
• 30-year fixed rate loan.
• 6% seller contribution limit allowed.
• Lender closing cost contribution by premium pricing allowed. Does not count against 6% seller limit.
• 100% Loan up to appraisal allowed plus you can add the 1.00% Guarantee Fee on top of that.
• Low .35% Annual Fee included in monthly payment.
• Finance closing costs & prepaids if appraisal Is higher than sales contract.
• No stated maximum loan amount; maximum loan based on repayment ability.
• No cash contribution required from borrower.
• No pre-payment penalty
• Liberal income limits (by county)
• Gift funds and grants allowed.
• No cash reserve requirements.
Property Qualification Highlights
• Existing Home
• New Construction
• New Manufactured Homes (Existing MH allowed under test program in 22 states)
• Modular Homes
• Town Homes
• Condos (Must be approved projects)
Prohibited Loan Purposes
• Co-signors not residing in the household
• Furniture and personal property
• Income-producing property unless minimal income-producing activity.
• Previously occupied manufactured homes…unless refinancing existing Agency loan or home built on or after 2006 and in the certain states (22 test states).

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/

How long does it take to close a Kentucky Rural Housing Loan in Kentucky?

Current Underwriting Turn Times on Rural Housing USDA Loans in Kentucky
Kentucky Rural Housing USDA Turn Times

Are you interested in knowing the current status of USDA’s turn times? USDA provides this information on their website.

 How long  will it take to close on your Rural Development USDA Loan in Kentucky?

On average, 30 to 45 days is usually okay. Sometimes quicker than 30 days, if the file is clean and submitted early to USDA office and the appraisal comes back okay.

It may take a 2-3 day longer turn time to Underwrite a USDA loan vs FHA, VA, Conventional loan. Not that big of a difference

The loan approval process for a USDA Loan is not like any other loan. Like all loan programs, the USDA Loan will have a lender that will assign the loan file to an Underwriter, who in turn will determine if the loan meets the loan program guidelines for approval.

Unlike other loan program, once the loan is approved by the lender/Underwriter, the file will be sent to one of the  centralized processing sites for the  Rural Development Offices in the Country. The turn time for loan approval varies  for Rural Development state offices, but most are on a 2-4 day turn time usually.

While some state offices have same day turn times, other states can take several weeks to sign off on the loan.

**Very Important ** Effective February 16th, 2020, all states were aligned to one of four production teams. Each production team has their own email inbox as shown below.

Production Teams States
Production Team One SFHGLPONE@usda.gov AK, AL, AZ, CA, CO, GU, HI, IA, ID, KS, MT, NM, NV, OR, SD, TX, UT, WA, WI, WP, WY
Production Team Two SFHGLPTWO@usda.gov AR, KY, LA, MN, MO, MS, ND, NE, NJ, NY, OK
Production Team Three SFHGLPTHREE@usda.gov CT, DE, GA, IL, MA, MD, ME, MI, NC, NH, RI, SC, VT, WV
Production Team Four SFHGLPFOUR@usda.gov FL, IN, OH, PA, PR, TN, VA, VI

Current USDA Turn times for Kentucky is listed below. Click on the link.

Loan Status

We are currently reviewing new loan applications and conditions received on or

Click on the link.

👇

https://www.rd.usda.gov/page/sfh-guaranteed-lender

 

Kentucky Rural Housing USDA loans require One of the biggest eligibility requirements is that the property be located in a designated rural area of Kentucky. 
You can use this map for Kentucky USDA Rural Housing Eligible Areas for 2022  below to determine if the property you have your eye on is eligible for a Kentucky USDA home loan.
 
 

Generally, these areas are outside of major metropolitan areas of Kentucky to include Jefferson County, Fayette County, and parts of Northern Kentucky are not eligible.  

There are some smaller towns like Frankfort, Richmond,  Winchester, Bowling Green, Paducah, Owensboro, Henderson and Radcliff that are not eligible for the USDA loan program–(see brown shaded areas on map link)
 
The second crucial element for qualifying or a USDA in Kentucky is the income limits. USDA income limits can’t make more than 115% of the median family household income for the area in which you wish you purchase the home.
 

The base USDA income limits are for most Kentucky counties below:

 

 

Kentucky Rural Housing ​USDA ​Loan Program for 2022 ​ust recently increased their income limits Families of 4 or less people can now have a maximum annual income of $103,500 (used to be $90,000) in most counties and 5 or more people in the household income can now be a maximum of $136,600  What does that mean? It means if before you were told you make too much to qualify for a ​Kentucky ​USDA loan, you might qualify now

 

New Income limits for most counties (*) in Kentucky are $103,500 for a household family of four and household families of five or more can make up to $136,600 with the new changes for

 

 

2022 Kentucky USDA Income limits, the Jefferson County Louisville, KY Metro area (**) saw an increase of$103,500for a family of four and up to $136,600 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)…

 
With regard to income, the max DTI ratio is 29/41, meaning the housing payment can’t exceed 29% of gross monthly income and total liabilities can’t exceed 41% of income. You can go higher with an automated GUS approval. 
You must also occupy the property you’re buying – no second homes or investment properties are permitted. But manufactured homes are USDA eligible. And there area loan limits just like there are on conventional mortgages and FHA loans..
 The Kentucky USDA home loan program is not limited to just first-time home buyers. Repeat buyers are also eligible!

Types of Kentucky USDA Home Loans

The USDA home loan only comes in one flavor; a 30-year fixed-rate mortgage. Nothing fancy or exotic here to ensure borrowers don’t get into any trouble with an ARM.
The 15-year fixed also isn’t an option because such a loan would imply that the borrower could afford a conventional loan and not need to rely on the USDA and its zero down financing program.
However, you can use a USDA home loan to both purchase a new property or refinance your current mortgage under certain circumstances. But no cash out is permitted if you perform the latter.
There is a sister program known as the Section 502 Direct Loan Program that assists low- and very-low income borrowers by providing subsidies that lower monthly mortgage payments for a select period of time.
The income limits for this program are significantly lower than those for the main USDA loan program, but the benefits are pretty amazing. For example, you can obtain an interest rate as low as 1% and get a 38-year loan term.

Minimum Credit Scores for a Kentucky USDA Home Loan Approval

Technically, there is no minimum credit score required to obtain a USDA home loan. However, lenders often impose overlays over USDA guidelines to ensure the borrowers are creditworthy.
Generally, you’ll need a credit score of 640 or higher to get approved for a USDA loan, though it’s possible to go lower with an exception or a manual underwrite.
When doing a manual underwrite, you should have compensating factors (such as long-term employment, assets, decent income, positive rental history etc.) to allow for the lower credit score. Your mortgage rate will also be higher to account for increased risk.
Also note that a higher credit score may be required if your DTI exceeds the allowable ratios.
In any case, you should really try to attain much higher credit scores if you want to get any type of mortgage, and favorable terms on said loan.
As with any other mortgage, it’s advisable to check your credit several months in advance to ensure your credit is on good shape, and if not, take steps to improve it before applying.
 

 

Credit score over 680: 


Perform a basic level of underwriting to confirm the
applicant has an acceptable credit reputation. Perform additional analysis if the
applicant’s credit history has indicators of unacceptable credit as noted in Paragraph 10.7
of this Chapter.

Credit score 679 to 640:


 Perform a comprehensive level of underwriting.
Underwrite all aspects of the applicant’s credit history to establish the applicant has an
acceptable credit reputation. Credit scores in this range indicate the applicant’s
reputation is uncertain and will require a thorough analysis by the underwriter of the
credit to draw a logical conclusion about the applicant’s commitment to making
payments on the new mortgage obligation. The applicant’s credit history should
demonstrate his or her past willingness and ability to meet credit obligations.

Credit score less than 640:


 Perform a cautious level of underwriting. Perform a
detailed review of all aspects of the applicant’s credit history to establish the applicant’s
willingness to repay and ability to manage obligations as agreed. Unless there are
extenuating circumstances documented in accordance with this Chapter, a credit score in
this range is generally viewed as a strong indication that the applicant does not have an
acceptable credit reputation.

Little or no credit history: The lack of credit history on the credit report may be
mitigated if the applicant can document a willingness to pay recurring debts through
other acceptable means such as third party verification or cancelled checks. Due to
impartiality issues, third party verification from relatives of household members are not
permissible. Lenders can develop a Non-Traditional Credit Report for applicants who
do not have a credit score in accordance with Paragraph 10.6 of this Chapter.

An applicant with an outstanding judgment obtained by the United States in a
Federal court, other than the United States Tax Court, is not eligible for a guarantee
unless otherwise stated in this Chapter. 

Validating the Credit Score. 


Two or more eligible trade lines are necessary to validate
an applicant’s credit report score. Eligible trade lines consist of credit accounts
(revolving, installment etc.) with at least 12 months of repayment history reported on the
credit report. At least one applicant whose income or assets are used for qualification
must have a valid credit report score. 

Confirm the applicant has at least two eligible tradelines reported to the credit bureau.
The tradeline may be open, closed and/or paid in full by the applicant. Eligible tradelines
include:

 Loan (secured or unsecured);
 Revolving (generally a credit which is not repaid by a certain number of
installments);
 Installment credit (generally repaid through a specified number of
installments such as automobile, recreational vehicle, or student loans);
 Credit card (offered by banking institutions, commercial enterprises and
individual retail stores. Consumers make purchases on credit and if payment
is made within a stipulated period of time, no interest is charged);
 Collection (an account whereby an original creditor transfers an unpaid,
delinquent balance to a collection agency to retrieve any monies owed);
 Charge-off (is the declaration by a creditor that an amount of debt is unlikely
to be collected)
 Authorized user accounts may not be considered in the credit score and credit
reputation analysis unless the applicant provides documentation that they have
made payments on the account for the previous 12 months prior to

application. 

Indicators of unacceptable credit.



 Foreclosure within 3 years:
 Including pre-foreclosure activity, such as a pre-foreclosure sale or short sale
in the previous 3 years\
 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;
\

 

 

 

Kentucky USDA  Home Loan Mortgage Insurance Costs

One of the upside of the USDA home loan is the fact that there’s an upfront guarantee fee that the borrower must pay. It is currently set at 1.0% of the loan amount, and .35% monthly mi premium called the annual fee, which is much cheaper than FHA and Conventional loans on lower credit scores. 
This can be financed into the loan amount so it’s paid off over time, as opposed to upfront out-of-pocket at closing. And if the USDA guarantee fee is financed the LTV can exceed 100%.
 

Refinancing a Kentucky USDA Home Loan

It’s also possible to refinance an existing USDA home loan into another USDA loan, and actually quite easy thanks to a streamlined program that doesn’t require an appraisal, credit report, or a debt-to-income calculation.
The only requirement is that you must have been current on your mortgage for the past 12 months, and it must lower your interest rate by at least 1%. 
There is also a non-streamlined USDA refinance option that requires an appraisal to gain approval, but allows you to roll closing costs into the new loan.

Kentucky Rural Housing USDA Home Loan Frequently Asked Questions

Do I need to make a down payment on a USDA home loan?
No, you can obtain 100% financing with a USDA loan, which is the main draw of the program. The only other government housing loans that provide zero down financing are VA mortgages.
What credit score do I need to get a USDA loan?
You need a 640 credit score to get an automated approval for a USDA loan, but some lenders will go to 581 with expensive pricing adjustments. If you have bad credit, you may want to take a hard look at your credit history and clean it up as much as possible before applying.
Do I need two years of job history to get approved for a USDA loan?
Not necessarily. If you’re new to the workforce or returning after a reasonable and explainable absence and likely to continue working it may be permitted.
Can I get a USDA loan if I’m self-employed?
Yes, but you’ll need to provide two years of tax returns to ensure it is stable and in the same line of work.
Are USDA mortgage rates high or low?
They’re generally pretty low relative to conventional mortgage rates (Fannie and Freddie) and pretty close to FHA mortgage rates. If an FHA 30-year fixed is 4.5%, the USDA 30-year fixed rate might be 4.5%. In other words, they’re low and competitive.
But you have to factor in the upfront and monthly mortgage insurance premiums as well.
Additionally, USDA loan rates can’t be more than 1% above the current Fannie Mae yield for 90-day delivery for 30-year fixed rate conventional loans. This regulates how high the rate can be based on the market average.
What loan types are available via the USDA loan program?
Just the 30-year fixed. No adjustable-rate mortgages and no other fixed products are available. Additionally, balloon mortgages and interest-only mortgages aren’t permitted, nor are prepayment penalties.
Can you buy a condo with a USDA home loan?
Yes, but it must be on the approved list from Fannie/Freddie, the FHA, or VA, and it must be located in a rural area.
Can I get a USDA loan on a second home or investment property?
No, USDA loans are only available on owner-occupied primary residences.
Can I get cash out via a USDA loan?
No, only rate and term refinances are available, along with purchase financing.
Can I roll closing costs into a USDA loan?
Yes, as long as the property appraises for more than the purchase price and the DTI isn’t exceeded as a result. You can also use seller concessions or a lender credit to cover closing costs.
Is there mortgage insurance on a USDA loan?
It’s technically called a guarantee fee, and includes both an upfront fee at closing (that can be financed) and a monthly fee that is ongoing.
!
How long does it take to get a USDA loan in Kentucky?
Like all other mortgages, it depends on your specific scenario, but the USDA loan approval process does require an extra step in sending the loan to the USDA for final approval. They basically check the lender’s work before they allow them to fund the loan. This step can add an extra few days to few weeks (or more) onto your closing date, so beware!
 

On average it takes 30-45 days to close a USDA loan in Kentucky, so about the same as any other government-backed mortgage loan like FHA, VA KHC etc. 

 
Kentucky USDA Rural Housing Map Below:👇 Click on link below to see if the home is located in a Rural Housing Area.
 
  •  
 
 
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
 

Text/call 502-905-3708
kentuckyloan@gmail.com
 
 
 
http://www.nmlsconsumeraccess.org/
 

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/

 
 

 

Joel Lobb (NMLS#57916)
Senior Loan Officer

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite

Louisville, KY 40223

Company ID #1364 | MB73346

Text/call 502-905-3708

kentuckyloan@gmail.com

 

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

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.

 

 

 

 

 
 
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