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/
Homebuyer Benefits for Kentucky Rural Housing Lenders
• No down payment required.
• Buy existing, build new, or refinance current Rural Development loan.
• Finance eligible loan costs up to 100% of the appraised value plus the one-time
upfront guarantee fee.
• Eligible loan costs may include: purchase price, repairs, lenders fees, closing costs,
essential household equipment.
• 30-year fixed rate that is negotiated between the applicant and lender.
• No maximum purchase price limits.
• Gift and grant funds allowed.
• Normal purchase contract time.
Why is the Single Family Housing Guaranteed Loan Program a top financing option for homebuyers?
USDA loans offer many advantages such as…
• No down payment so they can keep reserves in the bank for future unexpected costs.
• USDA offers the option to buy existing, build new, or refinance a current Rural Development
loan.
• Borrowers can finance eligible loan costs up to 100% of the appraised value plus the one-time
upfront guarantee fee.
• Eligible loan costs may include: purchase price, repairs, lenders fees, closing costs, essential
household equipment.
• 30-year fixed rate that is negotiated between the applicant and lender.
• No maximum purchase price limits. Maximum loan amount is determined solely by the
applicant’s repayment ability.
• Gift and grant funds allowed.
• Normal purchase contract time. No need to extend the contract time. Rural Development
typically issues a Conditional Commitment to the lender within 2-3 business days of receiving a complete application
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
Kentucky USDA loans are loans offered by the United States Department of Agriculture to those looking to buy homes in rural areas of Kentucky.
There are a few requirements and restrictions associated with this type of loan however, if you are afirst time home buyer in Kentucky with a limited income, no down payment and are looking to live in a rural part of Kentucky, this may be a good option for you to purchase a home going no money down and getting a 30 year fixed rate loan.
Income Requirements for USDA Loans in Kentucky
The Rural Housing USDA website provides an income eligibility calculatordepending on where you are looking for housing in the state of Kentucky. Because it is a nationally funded loan by the United States Government, the income restrictions will vary county-by-county but the loan recipient cannot make more than 115% of the median income for the area in which they are applying. There is also a chart you can consult that provides Kentucky USDA county income limits depending on the number of people in your home. Most Kentucky Counties will allow up to $90,200 for a household family of four or less, and up to $119,350 for a household of five. The Northern Kentucky Counties of Kenton, Bracken, Boone, Gallatin, Campbell allow for more. See Chart below
Households with 1-4 members have different limits as households with 5-8. Similarly, applicants living in high-cost counties will have a higher income limit than those living in counties with a more average cost of living.
Kentucky Score Requirements for a USDA Loan in Kentucky
Borrowers in Kentucky are required to have a FICO minimum credit score of 581 or higher. However, most USDA lenders will create a credit overlay where they will want a minimum credit score of 640 in order to get a GUS approval.
If the potential borrower has declared bankruptcy or foreclosure within the last 36 months, they would be ineligible for this type of loan.
If the mortgage was included in the Bankruptcy, sometimes the 36 month hold is ignored and you just have to make sure the property is out of your name before applying for a USDA loan
Can you get a USDA loan in Kentucky with a Previous Bankruptcy?
Chapter 7 bankruptcy, the bankruptcy must have been discharged at least 3 years prior to becoming eligible for a Kentucky USDA home loan.
Borrowers must be in a Chapter 13 bankruptcy for a minimum of 12 months, with documentation of 12 months of on time payments and a letter of authorization from the bankruptcy trustee authorizing you to enter into new debt.
In order to qualify for a USDA home loan after filing a Chapter 13 bankruptcy, additional documentation may be requested/required stating that the reason for the Chapter 13 filing was due to extenuating circumstances beyond the borrower’s control, temporary in nature and not likely to re-occur.
Home must be primary Residence.
Recipients must be U.S. Citizens, U.S. non-citizen nationals or Qualified Aliens to apply for this program. They must also agree to use the home as their primary residence and not as a rental property.
The property must be for a family including townhouses, single family homes, condominiums (FHA Approved), new construction or new mobile homes.
What areas of Kentucky Qualify for the USDA Loan Program?
The USDA provides a map of the where you can apply a USDA loans are eligible in Kentucky. The major metro areas of Jefferson County and Fayette County Kentucky are not eligible for Rural Housing Loans in Kentucky, along with some parts of Northern Kentucky next to Cincinnati; parts of Owensboro, Paducah, Bowling Green, Richmond, Frankfort, Winchester, Radcliff, Hopkinsville and Henderson Kentucky are not eligible.
If you have a property in mind, you can head over to the eligibility map to see if the home you are considering qualifies.
What are the advantages of USDA loans in Kentucky?
For many people in a low to middle-income bracket, saving for a down payment can be difficult. A USDA loan does not require the purchaser to put any money down toward the purchase price of a home. The government insures the loan in this case, should the borrower default, therefore the borrower is required to carry mortgage insurance during the life of the loan. The mortgage insurance for the USDA loan is provided at a more discounted rate than that required by traditional loans.
On USDA loans the mortgage insurance is 1% upfront, called a guarantee fee, and .35% monthly called an annual mortgage insurance fee to USDA. The beauty of USDA, is that it does not matter if you have a credit score of 640, or a credit score of 740, everyone pays the same premiums, unlike conventional loans.
They only offer 30 year fixed rates with no prepayment penalty, and usually the rates are very low and compare to FHA rates and much lower than conventional loans.
USDA loans take on average about 30 days to close, and the appraisal must meet FHA requirements. Home inspections are not required, and only new mobile homes are allowed on this home loan program.
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/
— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.
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***Most lenders will want a 620 or 640 score or higher.
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.),
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/
USDA Advance Copy Notice HB-1-3555 Chapter 11 USDA has announced that Chapter 11 of the HB-1-3555 will be updated and an advanced copy has been provided. Changes will become effective after USDA issues a Special Procedure Notice.
Clarification was added that revolving accounts with no outstanding balance are not required to be closed.
USDA eliminated guidelines provided that a retained property that has been rented for 24 months or longer may be omitted from the DTI, and
Added guidance that the income received from rents may only be included in the repayment calculation if the property has been rented for 24 mo. or more.
Guidelines were added that monthly payment for borrowers in debt management plans must be included in the DTI.
The calculation guidelines for Non-Fixed Student Loan Payments were updated removing the requirement for the greater of calculation to be used and added guidance for when the payment amount is zero.
Additional guidance was added that compensating factors supporting Debt Ratio Waivers for manually underwritten loans must be documented.
Clarification was added that federal, state and local taxes don’t need to be included in the DTI unless there is a payment plan in place.
Kentucky USDA Mortgage Lender for Rural Housing Loans 