Category: USDA/RHS Income limits by Ky Counties

Credit Requirements for A Kentucky Rural Housing RHS Mortgage Loan


2013 Credit Requirements for A Kentucky Rural Housing RHS Mortgage Loan  Kentucky First Time Home Buyers---Zero Down Loans Still Exist
REQUIREMENTS
  • · Credit report must match GUS Findings.
  • · Must not be older than 120 days on the date of closing for existing properties and 180 days for proposed and new construction.
  • · Must contain complete information provided by all three repositories.
  • · The credit report must show the following three required FICO scoring models for the report to be valid with Platinum Mortgage, Inc.:

1. Equifax Beacon 5.0

2. Transunion FICO Risk Score, Classic 04

3. Experian/Fair Isaac Risk Model V2.

  • · Must reflect a minimum of 1 score per borrower.

TRADELINE REQUIREMENTS:

GUS Approved: Each credit report must contain 2 acceptable tradelines with at least 12 month history and last active within the last 24 months (see below regarding acceptable tradelines).

Manual Underwrite: As determined acceptable by the underwriter.
CREDIT SCORE
  • · If more than one score is supplied by the same repository, the lesser of the scores will be used.
  • · Determining Qualifying Credit Score:

o Middle of 3

o Lower of 2

o If only one score is provided, that score is the qualifying credit score for that borrower.

Minimum credit score for:

  • · Manual Underwrite = 660
  • · GUS Approval = 660

LIABILITIES & CREDIT HISTORY

(INDEX)
H
OPEN CHARGE ACCOUNTS
ALIMONY, CHILD SUPPORT, OR SEPARATE MAINTENANCE
  • · Court-ordered payments should be documented by a copy of the court order.
  • · Borrower(s) must have an acceptable existing repayment plan for any arrearages and proof of 12 months on time payments, and/or be required to pay account in full prior to, or at closing.
  • · See Collections/Chargeoffs for additional requirements if there are arrearages.
CONTINGENT LIABILITIES
  • · If the borrower is a co-signer on an account paid by a 3rd party, the liability may only be excluded from the borrower debt ratios if evidence the primary obligor has been making the payments on time on the debt for a minimum of 12 months can be obtained.
  • · Court-ordered assignment of debt should be documented by a copy of the court order. Must have 12 months cancelled checks from the payer of the court ordered debt in order to exclude from the debt ratio.

PREVIOUS MORTGAGE:

  • · Section 1980.345(c)(1)(ii) requires all previous mortgage liabilities disposed of through a sale, trade, or transfer without a release of liability, to be included in the debt ratio calculation unless evidence can be obtained to confirm the remaining party has made payments over the last 12 months.
  • · In divorce settlements when one person retains ownership of a residence as a result of the proceedings, it does not imply that the person relinquishing ownership is automatically released of the financial liability associated with an existing mortgage debt. The divorce decree along with a release of liability from the mortgage creditor must be presented as evidence that an applicant is no longer legally responsible for the mortgage payment. If no release of liability is granted by the creditor then the applicant remains legally obligated for the debt. Quit claim deeds do not remove liability for mortgage debts.
DEFERRED INSTALLMENT DEBT May not be omitted from debt ratio. If the credit report does not reflect a monthly payment due at the end of the deferment period, the lender may request a copy of the applicant’s payment letter, or utilize the industry standard of estimating student loan payments as 1% of the loan balance.
NON-REIMBURSED EMPLOYEE EXPENSES If the borrower claims any non-reimbursed employee expenses (IRS Form 2106 or 1040 Schedule A), the borrowers monthly income should be reduced by the annualized monthly average.
BUSINESS DEBT IN BORROWER’S NAME When the account in question does not have a history of delinquency, the debt may be excluded with satisfactory evidence the obligation was paid out of company funds (such as 12 months cancelled company checks). If the account in question has a history of delinquency, the full debt obligation must be included in the borrower’s debt ratio.
FINANCED PROPERTIES Additional financed properties are generally not permitted as borrower may not own any other suitable housing at time of closing.
DEBTS WITH <6 REMAINING PAYMENTS The total debt ratio should include revolving debt regardless of when the debt will be retired. Installment loans will only be considered if the debt will be retired in more than six months. However, if the monthly payment on the debt is substantial, the payment will also be included in long term debt. The GUS system will automatically exclude debt that is eligible to be excluded. If not excluded by GUS the debt must be included in the debt ratio.
“PAYING DOWN” ACCOUNTS Not permitted. Settlement offers will not be considered as proof of balance
SETTLEMENT OFFERS Are acceptable on accounts that will be paid in full at closing as long as the offer is in writing from the creditor reporting on the credit report.
PAST DUE ACCOUNTS (NOT A COLLECTION OR CHARGE OFF) Recent derogatory credit >1×30 within the previous 12 months is not permitted unless approved by GUS. All past due accounts must be current at time of closing.
COLLECTIONS/ CHARGE OFFS
  • · No accounts converted to Collection/Charge off in previous 12 months allowed, unless approved by GUS.

GUS Approved:

  • · Medical Collections/Charge offs are not required to be paid.
  • · Other Collections/Charge offs, if >24 months, not required to be paid, otherwise accounts must be paid in full prior to, or at, closing.

Manual Underwrite:

  • · Medical Collections/Charge offs are not required to be paid.
  • · Other Collections/Charge offs must be paid in full prior to, or at closing.

Any unpaid Collections/Charge offs will require a satisfactory letter of explanation from the borrower.
OUTSTANDING FEDERALLY INSURED OR GUARANTEED DEBT Borrower(s) must have an acceptable existing repayment plan (minimum of 12 months), and/or be required to pay account in full prior to, or at closing. Borrower must also be cleared through CAIVRS.
JUDGMENTS/LIENS
  • · Must be paid at, or prior to, closing.
  • · Borrower(s) may not have any new Judgments/Liens within the previous 12 months, unless approved by GUS.
BANKRUPTCY (ALL) 3 years seasoning required from Discharge or Dismissal date.
FORECLOSURE 3 years seasoning required.
DEED-IN-LIEU OF FORECLOSURE 3 years seasoning required.
SHORT SALES 3 years seasoning required.
COMPENSATING FACTORS Some compensating factors include:

  • · Conservative use of credit
  • · Minimal increase in borrower’s housing expense
  • · Substantial cash reserves after closing
  • · Credit score >660
  • · Low total debt ratio (does not compensate for high housing ratio)
MULTIPLE RISK LAYERING Multiple risk layering is not allowed on manually underwritten loans:

  • · Payment Shock (>100%)
  • · Ratio Waiver
  • · Credit Waiver
  • · Credit Score <660
  • · Short Duration of Employment (less than 12 months employment with current employer)
Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
Free Preapproval for Kentucky RHS USDA Mortgage Loan
Kentucky Rural Housing RHS Mortgage Loan Credit Requirements for 2013
Related Articles

applynow

Bullitt County Kentucky USDA Home Loan and Rural Housing Loans for Bullitt County KY


Bullitt County Kentucky USDA Home Loan and Rural Housing Loans for Bullitt County KY.

via Bullitt County Kentucky USDA Home Loan and Rural Housing Loans for Bullitt County KY.

Kentucky USDA Rural Development Single Family Housing Guaranteed Loan Program


Kentucky USDA Rural Development Single Family Housing Guaranteed Loan Program

Kentucky Guaranteed Loans Offer Affordable Financing To Rural Homebuyers.

The mission of Kentucky Rural Development’s Single Family Housing Guaranteed Loan Program is to assist low to moderate income rural Kentucky  homebuyers achieve their dream of homeownership!

Kentucky Rural Development partners with approved local lenders to extend 100% financing opportunities to eligible rural individuals and families for the purchase of safe and sanitary dwellings. Guaranteed loans have assisted thousands of homeowners to purchase a home with affordable interest rates and loan terms.

Applicants must purchase a home within the eligible rural areas, and have a household income that does not exceed the established limits where the home is located. Additional Guaranteed Loan Features include but are not limited to:

  • 100% financing, no down payment is required. The loan amount may not exceed 100% of the appraised value, plus the guarantee fee may be included.
  • Guarantee Fee applies: may be rolled into the loan amount.
  • Flexible credit guidelines. Non-traditional credit histories may be accepted.
  • Fixed 30 year interest rates apply. Lenders and applicants agree upon interest rate.
  • Qualifying ratios are 29% for housing costs and 41% for total debt. Lenders may request an exception to exceed these ratios when strong compensating factors are identified.
  • No maximum purchase price. Qualifying ratios and the applicant’s stable and dependable income will determine home affordability.
  • Eligible property types include existing homes, new construction, modular homes, Planned Unit Developments (PUD’s), eligible condominiums and new manufactured homes.
  • Eligible closing costs and lender fees may be included in the loan or paid by the applicant.
  • Gift/Grant Funds/Mortgage Credit Certificates (MCC’s)/Seller Concessions are allowed.
  • Eligible repairs and improvements may be included in the loan.
  • Applicants apply with an approved lender of their choice.
  • Not limited to first time homebuyers.

 

Changes to RHS Guarantee and Annual Fee

Effective on October 1, 2012, RHS will revise the Up-Front Guarantee Fee and Annual Fee structure as follows:

 

Up-Front Guarantee Fee

Through

Sept. 30, 2012

Effective  Oct. 1, 2012
Purchase Transactions (no change)

2%

2%
Refinance Transactions

1.5%

2%

 

Annual Fee

Through

Sept. 30, 2012

Effective  Oct. 1, 2012
Purchase Transactions

.30%

.40%
Refinance Transactions

.30%

.40%

 

Loan guarantee requests submitted to RHS by September 30, 2012, in which a conditional commitment has not been issued, will be subject to the new, October 1, fee structure.  Lenders are encouraged to plan for the changes because, as mentioned previously, some RHS offices are experiencing extreme backlogs in loan guarantee delivery.

 

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

Related Articles

Kentucky USDA Mortgage Upfront Guarantee Fee and the monthly mortgage insurance Annual fee


August 1, 2012

 

Kentucky USDA Mortgage Upfront Guarantee Fee and the monthly mortgage insurance Annual fee 

 

Effective on October 1, 2012, the start of Fiscal Year (FY) 2013, Rural Development will revise the Up-Front Guarantee Fee and the monthly mortgage insurance fee structure as follows on a Kentucky USDA Mortgage loans in Kentucky for the Guaranteed Loan RHS :

 

Up-Front Guarantee Fee

FY 2012

Through

9/30/2012

FY 2013 Effective

10/01/ 2012
Purchase Transactions (no change)

2%

2%
Refinance Transactions

1.5%

2%

 

Annual Fee

FY 2012

Through

9/30/2012

FY 2013

Effective 10/01/2012
Purchase Transactions

.30%

.40%
Refinance Transactions

.30%

.40%

 

The FY 2013 fee structure is applicable to all Conditional Commitments (Form RD 1980-18, “Conditional Commitment for Single Family Housing Loan Guarantee”) issued by Rural Development on or after October 1, 2012.  Loan guarantee requests submitted to Rural Development by September 30, 2012, in which a Conditional Commitment has not been issued, will be subject to the FY 2013 fee structure.

 

Lenders are encouraged to plan for the changes noted and should keep in mind that some Rural Development offices are experiencing extreme backlogs in loan guarantee delivery.  There are no exceptions to the FY 2013 fee structure. Therefore, starting on October 1, 2012 all Conditional Commitments will be subject to the FY 2013 fee structure, regardless of the date the request was received by Rural Development.

 

The FY 2013 fee structure is only applicable to Conditional Commitments issued on or after October 1, 2012, Conditional Commitments issued by Rural Development prior to this date are notsubject to the new fee structure.

 

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

Today’s Rates: 

Conforming1 Loan Rate FHA
30 Year
Fixed		 15 Year
Fixed		 30 Year
Fixed
Interest Rate 3.75% 2.875% 3.375%
Annual Percentage Rate (APR) 3.925% 3.182% 4.410%
Monthly Payment $833.61 $1,232.26 $995.53
Payment Term 30 YEARS 15 YEARS 30 YEARS
Loan Amount $180,000 $180,000 $180,000
Est. Prepaid Finance Charges $3,800 $3,800 $3,800
Down Payment 25% 25% 3.5%

Be aware that mortgage rates can change without notice and apply only in certain conditions. The APR for the loan products shown reflects the interest rates and estimated prepaid finance charges which include 1% of your loan amount to be paid toward the loan origination charge, but does not include all closing costs or discount points. The displayed rates assume that you’re refinancing a single-family primary residence with a 90-day-lock.

These mortgage rates are based upon a variety of assumptions and conditions which include a consumer credit score which may be higher or lower than your individual credit score. Your loan’s interest rate will depend upon the specific characteristics of your loan transaction and your credit profile up to the time of closing.

The monthly payment amount displayed includes principal, interest and any required mortgage insurance. The payment amount does not include homeowner’s insurance or property taxes which must be paid in addition to your loan payment.

Conventional loans with a down payment less than 20% require mortgage insurance which could increase the monthly payment and APR.

FHA loans require both an upfront and in most cases, an annual mortgage insurance premium. The premium varies based on the individual loan characteristics. For illustrative purposes on FHA loans, our loan detail results include an estimated mortgage insurance payment added to the monthly principal and interest payment.

1 Conforming loan amounts for certain loan products have increased in federally designated metropolitan areas. Larger limits available in the state of Hawaii. To find out if these new loan limits can help meet your needs, contact us

Related Articles

Section 502 USDA Guaranteed Loan Program Rural Refinance Pilot Guidelines for Kentucky Mortgages


Rural Refinance Pilot Loan

 

Brief Pilot Description: The Rural Refinance Pilot is available to eligible borrowers who qualify to refinance their current USDA mortgage loans.

Under the Rural Refinance Pilot program, a lender does not need to submit a new credit report, new appraisal, any HUD Handbook minimum property determinations, or any additional property inspections.

Eligible “Hardest Hit” States: The following states may participate in the Rural Refinance Pilot: Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, and Tennessee. Additional States are not eligible at this time.

Eligible Borrowers: Current Section 502 Direct or Guaranteed Loan borrowers must:

1. Meet current income eligibility requirements;

2. Reside in an eligible rural area or an area that was eligible at the time of the original loan closing; and

3. Have made timely mortgage payments for the 12-month period prior to the refinance. Overview of Rural Refinance Pilot Guidelines: 1. The existing loan must be a Section 502 Direct or Guaranteed loan. 2. The new interest rate must be a fixed rate 100 basis points below the current interest rate. 3. The new term of the refinance loan may not exceed thirty years from the date of closing

. 4. A Rural Refinance Pilot loan may only include the principal balance of the loan plus a portion of or the full upfront guarantee fee. The applicable upfront refinance guarantee fee is 1.5 percent. No cash out is permitted to the borrower. Accrued interest, closing costs, lender fees, and late fees are not eligible to be part of the refinance loan.

5. An annual fee also applies. For FY 2012 the applicable annual fee is .3 percent.

6. A new appraisal, new credit report, HUD Handbook determination and additional property inspections are not required. The original appraisal amount may be used from Guaranteed Loan System to process the loan.

7. Ratio calculations are not required. Therefore debt ratio waiver requests will not be necessary.

8. Rural Refinance Pilot loans must be manually underwritten. They cannot be processed through the Guaranteed Underwriting System.

9. Customary and reasonable closing costs and other fees may be collected from the borrower by the lender. Such charges may not exceed the cost paid by the lender or charged to the lender by the service provider. An origination fee of up to one percent of the total loan amount may be charged to the borrower.

10. All the following documentation is required:

a. Form RD 1980-21 “Request for Single Family Housing Loan Guarantee”.

b. Income verifications for all adult household members.

c. Uniform Residential Loan Application.

d. Evidence of qualified alien status, if applicable.

e. FEMA Form 81-93 “Standard Flood Hazard Determination.” Appropriate flood insurance must be obtained if the property is in a flood zone at the time of the new loan closing, even if the area was not in a flood zone at the time of the original loan closing. A flood elevation survey is not required.

f. Evidence of previous 12 month mortgage payment history. The lender must secure evidence to document the borrower(s) has paid the loan on time for the previous 12 months. The lender may utilize a Verification of Mortgage obtained from or provided directly by the loan servicer that lists the payment history for each of the previous 12 months. As an alternative, the lender may submit a credit report which reflects a satisfactory mortgage payment history over the past 12 months.

If the lender submits a credit report to Rural Development as proof of payment history, only the payment history of the current mortgage will be considered.

Credit waivers or explanations for adverse credit that may be present on the report are not required.

11. All additional requirements of RD Instruction 1980-D and applicable Administrative Notices continue to apply. Rural Development Responsibilities:

1. Request funding for the refinance if necessary by sending an email request to: sfhgld@wdc.usda.gov. Please include the State and the amount of funding needed.

2. Retrieve original appraisal amounts in GLS when processing Rural Refinance Pilot transactions.

3. Review the previous 12-month mortgage payment history. If a credit report is submitted, only review the 12-month mortgage payment history.

If the mortgage account is currently delinquent or has been reported delinquent in the previous 12 months, the borrower is not eligible. Agency staff should use the “Borrower ID” with GLS Report “GLSST01: Status of a GRH Loan Account” to ensure the loan is currently active and not in default.

4. Enter 0 in the “FICO Score” data field when processing a Rural Refinance Pilot application. 5. Enter the repayment income calculation in GLS, but do not include any “Additional Liabilities” amounts.

In the event the new mortgage payment results in ratios above 29 and/or 41 percent, check the box that indicates a debt ratio waiver has been issued by the Agency. 6.

In the “Agency Notes” section of the GLS Application screen enter “Rural Refinance Pilot Loan.” This will identify the loan as part of this pilot in the event of a loan review. 7.