I am a Kentucky based USDA Mortgage Lender that has originated over 300 KY Rural Housing Mortgage Loans in Kentucky-CALL OR TEXT 502-905-3708 FOR USDA MORTGAGE LOAN
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.
Rate/Term Refinance (with • Allows financing of unpaid principal and eligible costs subject to available equity Streamlined Refinance (without • Allows financing of unpaid principal balance and upfront guarantee fee along with accrued interest • Debt ratios are calculated Streamlined Assist Refinance (no appraisal effective 6/2/2016) • Allows financing of unpaid principal balance and eligible costs • Debt ratios not calculated
Streamline Refinance • A new appraisal is not required (unless the loan being refinanced is a Direct Loan and subsidy recapture is required). • The new loan amount may not exceed the original loan amount of loan being refinanced. • The new loan is limited to: • The principal balance of the loan being refinanced • The upfront guarantee fee (if financed) • Accrued interest (current interest) • Reasonable and customary fee for reconveyance • Subsidy recapture due for Direct Loan borrowers may not be included in the new loan amount • A borrower may be removed from the loan as long as at least one original borrower remains on the new loan. • All other rate/term refinance requirements, including debt ratio calculation and limits apply. (Except as outlined above, all Rate/Term Refinance requirements also apply to Streamline Refinance. See the HB 1 3555 for all three types of refinance transactions allowed.)
Streamlined Assist Refinance (cont.) • The new loan amount is limited to: • The unpaid principal balance of the loan being refinanced • The upfront guarantee fee (if financed) • Accrued interest (current interest) • Eligible loan closing costs (not to exceed 2% of total loan amount) • Permissible bona fide discount points (not to exceed 2% of total loan amount). • Funds to establish an escrow account for real estate taxes and insurance. • Subsidy recapture due for Direct Loan borrowers may not be included in new loan amount; however, the cost of any appraisal obtained for recapture purposes is an eligible closing cost and may be included. Note: The maximum loan amount cannot exceed the balance of the loan being refinanced, plus the guarantee fee and reasonable and customary closing costs (including funds necessary to establish a new tax and insurance escrow account). Subordinate financing, such as home equity lines of credit and down payment assistance “silent” seconds, cannot be included in the new loan amount. Unpaid fees, past due interest and late fees/penalties due the servicer, cannot be included in the new loan amount. (Except as outlined above, all Rate/Term Refinance requirements also apply to Streamline Assist Refinance.)
How Can I Get Rid of Mortgage Insurance for a Rural Housing Loan In Kentucky?
USDA’s Mortgage insurance is for the life of the loan
Mortgage insurance advantages & strategies for lower down payment and payment USDA has an annual fee which is similar to private monthly mortgage insurance premiums and an upfront guarantee fee paid to USDA at closing that is currently equal to 1% of the loan amount.
The annual fee is recalculated each year based on the new balance of the mortgage. The annual fee is currently only .35 which began October 1, 2016.
The annual fee percentage on USDA loans stays for the entire 30 year term but because it is based on the annual mortgage balance. Therefore, the dollar amount decreases each year.
How to calculate monthly mortgage insurance for Kentucky USDA loans:
Take Loan amount x 1.0101% (USDA funding fee) x .0035 / 12 = monthly
fee to include in the monthly mortgage payment.
So on a $100,000 sales price, going no money down, this would yield a total loan amount of $101,000 with a monthly mortgage insurance premium of $29.45 a month.
This is very cheap mortgage insurance when compared to an Kentucky FHA loan.
Section 504 Repair Loan and Grant Program for Kentucky USDA RHS Loans
If you missed the live webinar to learn about recent changes to the Section 504 Single-Family Housing Repair Loan and Grant Program, the presentation slides from the webinar are available on the U.S. Department of Agriculture (USDA) Rural Development’s website. This information is for individuals and organizations, including nonprofits and public agencies, who work with affordable housing products such as weatherization, home repairs, and Section 504 application packaging.
The slides will provide information on the following:
An overview of recent changes to the Section 504 Single-Family Housing Repair Loan and Grant Program.
For a brief overview of the 504 program, please watch the USDA Helps You Make Home Repairs
Program Guidelines & Terms –Section 504 Loans
• Maximum outstanding 504 loan amount is $20,000
• Interest rate is fixed at 1%
• Maximum term of 20 years (term and payment is based upon the
family budget)
• Appraisal and escrow account is required for loans over $15,000
• Flood insurance is required for properties located in a flood zone
• Mortgage, title work and closing agent required for loans of
$7,500 or more
• Mortgage is filed for loans of $7,500 and over
• Assets above $15,000 ($20,000 for elderly/disabled households)
must be applied toward repairs.
• Residential Mortgage Credit Reports are ordered by Agency for
loans of $7,500 and over (RMCR fee paid by Rural Development
General Eligibility Criteria – Section 504 Loans
• Household income must not exceed “very low” income
limits; < 50% HUD median income
• Applicant must own home (to include site when
considering manufactured housing) and occupy house on a
permanent basis
• Demonstrate repayment ability based upon a family budget
• Stable and dependable source of income
• Acceptable credit – reasonable ability and willingness to
meet debt obligations
• Meet asset limitations (15K non-elderly and $20K elderly*)
Program Guidelines & Terms –Section 504 Grant
• Maximum cumulative lifetime grant assistance is $7,500
• Grantee must sign Grant Agreement requiring occupancy
of home for 3 years
• No lien on property
• Repairs to remove health and safety hazards or to make the
home accessible and useable for household members with
disabilities.
General Eligibility Criteria – Section 504 Grants
• At least one applicant must be 62 years of age or older.
• Household income must not exceed “very low” income limits;
< 50% HUD median income
• Applicant must own home (to include site when considering
manufactured housing) and occupy house on a permanent basis
• Repairs must be necessary to remove health and safety hazards or
to make the home accessible and useable for household members
with disabilities.
• Must demonstrate a lack of repayment ability based upon a
household budget.
• Meet asset limitations (15K non-elderly and $20K elderly*)
• No outstanding federal judgments
SECTION 504 PROPERTY REQUIREMENTS
• Must be modest for the area; market value cannot be in
excess of USDA established area loan limit
• Property must be located in a designated rural area
• Must not have an in-ground swimming pool
• If the property has income producing land or structures, we
may use loan/grant funds as long as repairs are used for the
residential portion of the home.
• Mobile or manufactured homes must be on a permanent
foundation or be placed on a permanent foundation with
loan or grant funds.
For additional program Information, please visit the following USDA webpages:
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?
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:
What Parts of Northern Kentucky Are Eligible for the USDA Home Loan?
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.
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#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.
Kentucky USDA Mortgage Lender for Rural Housing Loans 