Mortgage Loan OfficerIndividual NMLS ID #57916
American Mortgage Solutions, Inc.
Quick Guide to Kentucky USDA Rural Development Loans Approval Requirements
Mortgage Loan OfficerIndividual NMLS ID #57916
American Mortgage Solutions, Inc.
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.
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 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.
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.
The base USDA income limits are for most Kentucky counties below:
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)…
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.
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.
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.
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
Loan (secured or unsecured);
Revolving (generally a credit which is not repaid by a certain number of
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
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 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;
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.
Joel Lobb (NMLS#57916)
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite
Louisville, KY 40223
Company ID #1364 | MB73346
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.
An Unnumbered Letter (UL) dated February 4, 2022, has been issued which increases the appraisal fee to $750 and the conditional commitment fee to $825 under the direct programs. The fee increases are effective March 6, 2022. The increased fees reflect market price increases for origination appraisals in rural areas and the average cost of appraisals under the programs’ nationwide contract with the Appraisal Management Companies.
Rural Development staff will follow the implementation responsibilities outlined in the UL, which has been posted to https://www.rd.usda.gov/resources/directives/unnumbered-letters under Housing Programs (or click here for a direct link).
For potential home buyers with student loans that are either in a deferred payment status or being paid back through an income based or graduated repayment program, the treatment of this liability needs to be considered.
When student loan debts are not currently being paid upon, due to the loan applicant still being in school or recently graduating from school, the monthly liability will be calculated based on the lower of 1/2 of 1% of the outstanding loan balance or the monthly payment listed on the credit report.
Example if you owe $100,000 in student loan debt the monthly payment will be $500. Also, if the student loan is being paid upon, but at a lesser amount than originally agreed, such as the payment being determined based on repayment ability (i.e. Income Based Repayment Plan), the monthly payment will be calculated the same as above (monthly liability = 1/2 of 1% of the outstanding loan balance).
This offers a significant improvement compared to the FHA Loan guidelines, in which student loans that are in deferment or under an income based repayment plan will have the monthly payment calculated at 1% of the outstanding loan balance.
If the student loan is being paid upon as originally agreed upon when the loan was first obtained, the monthly liability will be the amount specified on the credit report.
Or if the student loans have been consolidated into a new loan, so long as the monthly payment is based on a fixed repayment schedule, that payment will be used when calculating the borrower’s debt to income ratio.
If you have yet to apply for your Kentucky USDA Loan pre-qualification request, you can do so online
USDA Loan assumes a very conservative perspective on financing homeowners who already own a home, unless the borrower can prove that the current home is not “adequate or suitable” for the borrower’s needs.
The USDA Loan assumes a very conservative perspective on financing homeowners who already own a home, unless the borrower can prove that the current home is not “adequate or suitable” for the borrower’s needs. Owning a house can be defined as not only being on the mortgage loan but also being on title to the property without being on the mortgage loan for that property. Factors that can determine when a house is not “adequate or suitable” include the following:
Under no circumstances will the borrower be able to obtain another USDA Loan if the existing home is already financed using a USDA Loan. When qualifying for a USDA Loan and the borrower already owns another house, the costs associated with the current house, including the mortgage payment, property taxes, homeowner insurance, condo or Homeowner Association Fees, and lot rent in the case of a manufactured home, will be considered a liability to the borrower when calculating their debt-to-income ratio.
If the borrower has two years of rental history, as documented on their tax returns, the mortgage liability can be offset by the rental income. Also, in the case of a court ordered divorce settlement where the borrower can document 12 months of on-time mortgage payments being made by their ex-spouse, the liability can be excluded.