Kentucky Rural Housing USDA loan program

What are the eligibility requirements for a Kentucky USDA loan?

 

The Kentucky Rural Housing USDA loan program has certain eligibility requirements .

Must be located in a eligible USDA Rural Housing Area.
The home would be your primary residence, not a rental property
Household income requirements beginning around $86,850 for a family of four and up to $115,400 for a family of five or more
Clear Cavirs Numbers.
No minimum credit score requirement but most lenders that offer USDA loans will want a 620 credit score or higher

What are USDA loan fees in Kentucky for 2020?

There are two fees on a USDA loan. An upfront fee, called the Guarantee fee and the monthly annual fee.

The upfront guarantee fee for fiscal year 2020 is 1 percent of the loan amount. This fee can often be rolled into the mortgage, instead of paying it out of pocket. The annual fee for  is .35 percent of the loan amount.

It’s important to check the maximum income limits   for your family size and where you live to get the most accurate data.

 

Advantages of USDA Loans

Zero Down Payment

Low Credit Score Requirements

Can finance closing costs up to appraised value

Streamline refinance an existing USDA with less documentation

No max loan amount

 

Disadvantages  of USDA Loans

only eligible in rural areas

Must be 3 years removed from bankruptcy or foreclosure

Limited to Income Requirements

Debt to income ratios tighter qualifying guidelines than FHA, Fannie Mae

Joel Lobb Mortgage Loan Officer Individual NMLS ID #57916 American Mortgage Solutions, Inc. 10602 Timberwood Circle Louisville, KY 40223 Company NMLS ID #1364 click here for directions to our office Text/call: 502-905-3708 fax: 502-327-9119 email: kentuckyloan@gmail.com https://www.mylouisvillekentuckymortgage.com/

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


email:
          kentuckyloan@gmail.com

 

Interest Rate Decrease for USDA Rural Housing Loans Direct Programs

SFH Direct Loan and Grant

Kentucky USDA Increased Income Limits for 2020

Kentucky USDA Loan Requirements Updated Income Limits for 2019

 

Effective July 22, 2019, income limits for all Kentucky Rural Housing USDA Rural Development Loans and their  Counties have increased.

After a four year pilot that was tested in 16 States, USDA published a final rule making changes to allow for a two-tier income structure. Rather than buyer(s) meeting the income limit based on household members, income limits are divided into 2 groups: 1-4 and 5+ household members. Each Kentucky county has an income limit for families with 4 or fewer people, and each has a limit for households with 5 or more people.

Reminder on how to exceed Kentucky USDA Income Limits using the following exceptions:
• $480 for each child under 18
• Documented child care expense
• Full-time college students 18 or older
• Disability expense incurred
• Medical expense for elderly or disabled

The Guaranteed Underwriting System (GUS) and the Income Eligibility calculator on USDA Eligibility website have been updated to use the new income limits for every Kentucky County this is eligible for USDA loans in Kentucky

New Income limits for most counties (*) in Kentucky are $86,850 for a household family of four and household families of five or more  can make up to  $114,650.

The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Brackenn, Gallatin, and Pendleton are $93,500 for a household of four or less and up to $123,400 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)

$93,500 (family size 1-4)
$123,400 (family size 5 or more)

Grant, Owen & Pendleton Counties (N. KY)

$86,850 (family size 1-4)
$114,650 (family size 5 or more)

With the new changes for 2020 USDA Income limits, the Jefferson County Louisville, KY Metro area (**) saw an increase of $87,600 for a family of four and up to $115,650 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, ) see  map below

,Below is the website where you can check and make sure

http://kentuckyruralhousingusdaloan.blogspot.com/p/usda-rural-housing-loan-program.html

 

click here free USDA quote, pre-approval and property eligiblity report

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

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

click here for directions to our office

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

 

start an online application pre-appproval click here

 

Northern Kentucky Mortgage Guidelines for the USDA Rural Housing Loan Home Program

If you are looking to buy a home in Northern Kentucky,  to either own a home on acreage in the country with 100% financing on your home loan with zero down,  then you need to look at the Kentucky USDA Rural Housing Loan Program.

 How Does the USDA Home Loan Work in Northern Kentucky?

Here are some of the Key Financial Elements of the USDA Home Loan in Northern Kentucky:

  • Low to Middle-Income Households are generally eligible – If the Household Income is too high, you may be ineligible.
  • 30 Year Fixed Term Loans at Today’s Low Interest Rates compared to FHA, USDA and other government mortgage loans
  • Qualifying rations are 29% for Housing and 41% for total debt. or possibly higher with a credit score over 640.
  • Rural Development Loan Guarantee Fee applies, currently 1% USDA funding fee and .35% monthly mi premium
  • Zero Cash required for the Down Payment.  If access to 20% down payment, then you cannot use this program.
  • Flexible Credit Guidelines, where non-traditional histories may be accepted. USDA will do a no score loan, but it is very difficult to qualify for so your best bet is to get your credit scores to 620 to 640 range and go from there. You will need two trade lines on the credit report for last 12 months, so no limited credit history is allowed on this program.
  • Eligible properties include: Existing Homes, New Construction, New Manufactured Homes, Modular Homes, and eligible Condos!—No used mobile homes.
  • Eligible Repairs may be included in the loan as well! If home appraises for more than sales price, sometimes you can finance these repairs into the loan.
  • They’re are two income tests. Compliance income and repayment income. See pic below for answers about Northern Kentucky Counties with max income limits for household
  • Home must be in an eligible area. See map below of Northern Kentucky Eligibility for USDA Rural Housing Loans

What Parts of Northern Kentucky Are Eligible for the USDA Home Loan in 2019?

With Northern Kentucky being part of the  metro area  of Cincinnati, the USDA has provided a map of the Ineligible Northern part of the Counties of Boone, Kenton, Campbell counties  which means, the remaining southern part of the counties of Boone, Kenton, Campbell being  eligible.  Here is the Northern Kentucky rural housing  map courtesy of the USDA:

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What Parts of Northern Kentucky Are Eligible for the USDA Home Loan in 2019?

What are the income limits for a Rural Housing Loan in Northern Kentucky?

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.

Northern Kentucky Counties
Boone, Kenton, Campbell, Bracken and Pendleton, Gallatin ***
Cincinnati (OH, KY, IN FMR) Household income of 4 or less:

***$90,050
Household income of 5 or more:

***$118,850
Shelby $86,450 $114,100
All Other Areas $82,700 $109,150

Here are a few more items to check off before looking into this loan or at a particular property:

  • Must be Owner Occupied as the Primary Residence;
  • Home must not be used to produce Income, nor can there be Income Producing Buildings or other Accessories that produce Income on the property; i.e. no working farms or cows, livestock, crops etc. Can be a small hobby farm.
  • No foreclosed homes that  that need a lot of work.
  • Home must be structurally sound and in reasonably good repair and pass FHA standards on an appraisal.
  •  Home  cannot be used for a Rental Property or, be a major fixer




 

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

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.

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.