Tag: Business

Kentucky Single Family Housing USDA RHS Guaranteed Loan Program Update 2011

Single Family Housing Guaranteed Loan Program
May 26, 2011

Kentucky USDA / RHS Single Family Housing Guaranteed Loan Program

May 26, 2011

GUARANTEED LOAN FUNDING UPDATE:  HELP WANTED!
$24 BILLION DOLLARS ALLOCATED FOR GUARANTEED LOANS!

$24 billion dollars is available in Fiscal Year 2011 (through September 30, 2011) in the Single Family Housing Guaranteed Loan Program (SFHGLP).  To utilize these available funds, WE NEED YOUR HELP!

SERVE RURAL HOMEBUYERS!  In the past, funding shortages due to overwhelming volume and program demand may have prohibited some homebuyers from utilizing the SFHGLP.  Fiscal year 2011 will be different!  Congress responded to lender requests for more funding and delivered $24 billion for the current fiscal year!

LEND WITH CONFIDENCE!  Future Guaranteed Loan Funding Updates will continue to be released in order to keep our lending partners informed of available funding levels.
As of May 26, 2011:
TOTAL $ OBLIGATED:      $9.2 BILLION
TOTAL # LOANS:                 70,759

OVER $15 BILLION REMAINS TO
SERVE RURAL HOMEBUYERS!

Thank you for your support of the Single Family Housing Guaranteed Loan Program!

Understand Your Credit Score To Help Avoid Foreclosure : Fannie Mae

Understand Your Credit Score To Help Avoid Foreclosure : Fannie Mae.

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What if My Lender Quoted Me One Rate at Application but Raised it at Closing?

What if My Lender Quoted Me One Rate at Application but Raised it at Closing?.

via What if My Lender Quoted Me One Rate at Application but Raised it at Closing?.

Seller Concessions to Close the Transaction

Seller Concessions to Close the Transaction.

via Seller Concessions to Close the Transaction.

Kentucky Mortgage Underwriting Guidelines updated for 2013

Kentucky Mortgage Underwriting Guidelines updated for 2013.

via Kentucky Mortgage Underwriting Guidelines updated for 2013.

Seller Tax Issues and the Sale of a Principal Residence for Kentucky Home Buyers and Homeowners

Seller Tax Issues and the Sale of a Principal Residence for Kentucky Home Buyers and Homeowners
The following information will assist each Seller of a principal residence with the tax issues they should discuss with a qualified tax preparer prior to filing a 2012 tax return.

 

   I.              General Summary

The sale of real or personal property may generate federal and/or state tax liabilities for a seller. Generally, the seller will need to compare the “basis” of the property in light of the sales price in order to determine whether there is a potential “capital gain” or “capital loss” under the tax code. Fortunately, the IRS allows the great majority of homeowners to treat the sale of a principal residence as a “tax-free” event, regardless of whether any portion of the proceeds from the sale are reinvested into a new home.

II.            Reporting Requirements

Each seller should be asked by the closer to complete an IRS Form 1099 Certification, which is an effort by the IRS to receive notice that a seller may have a potential tax liability or information to report in relation to the sale. The questions asked on this form relate only to whether the title agency is required to file an electronic “IRS Form 1099-S”, not whether tax is owed for the sale.

III.           FORM 1099 Certification

If any of the following questions are not “true” for each seller, the title agency will file an electronic Form 1099-S and each seller will need to seek competent tax advice prior to filing their tax return. The questions can be summarized, as follows:

Q: The property served as the seller(s) principal residence for a period of 2 out of the last 5 years? ( T / F )
Q: The sellers have not sold another principal residence in the past 2 years? ( T / F )
Q: The sellers did not use the property for “business” or “rental” purposes? ( T / F )
Q: The sales price was (i) $250,000 or less for an unmarried owner, or (ii) $500,000 or less for a married couple who will file a joint return? ( T \ F )

Principal residence” will be determined based upon the “ownership & use test”, which relates to factors such as (a) the amount of time spent living in the home, (b) employment location, (c) the address listed on bills, tax returns, driver’s license, voter registration, and (d) the location of banks, recreation clubs, and religious organizations frequented by the owners.

Special Considerations: There are many circumstances [examples include work-related moves, death of a spouse, health issues for you or a family member, divorce, extended duty military service, receipt of a “first-time” homebuyer credit, ownership of multiple tracts of land, natural disasters, and many other “unforeseen circumstances”] that may require additional tax guidance in order to identify, minimize or exclude the tax liabilities associated from the sale of a principal residence.

IV.           FORM 1099-S Contents

If each seller fails to certify all statements in Section III as “true”, the title agency will file an electronic Form 1099-S at the end of the tax year, which includes each seller’s (a) name and mailing address, (b) description of the property sold, (c) closing date, and (d) gross proceeds (sales price). Each seller must provide written instructions if the sales price is to be allocated or “split” between sellers.

 

If you would like a handout of this summary to provide to your customers, feel free to print out this flyer.

Disclaimer : This email is only intended to provide general information regarding tax issues as they pertain to the sale of a personal residence, does not create an attorney/client relationship between the sender and recipient, and should not be relied upon as specific legal or tax accounting advice. If you need legal assistance with respect to a specific transaction, please contact us to discuss the specific facts. 

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*

applynow

Kentucky Rural Housing Service (RHS) program Mortgage

Kentucky Rural Housing Service (RHS) program Mortgage

Program Descriptions RHS Fixed Rate 2 6/15/2011

The loan must meet the minimum FICO requirement listed in the following grids: Loans must be manually underwritten. Second Homes and Investment properties are not eligible. LTV/CLTV/HCLTV/FICO Primary Residence

Min Fico 640 Ranges FICO Type Units *LTV CLTV HCLTV Salaried Self-Employed Purchase & Rate/Term Refinance 1 103.5% 100% NA 640 640 1 101% 100% NA 640 640

* Purchase: Maximum LTV is 103.5% of appraised value when guarantee fee is financed. Refinance: Maximum LTV is 101% of appraised value when guarantee fee is financed. Rate & Term refinancing is available on current RHS loans only.

Calculation of the Guarantee Fee: The Guarantee Fee may be calculated in two ways depending on whether the fee will be financed. Transaction Type Guarantee Fee Not Financed Guarantee Fee Financed Purchase Transactions Multiply the loan amount by 3.50% and round to the nearest cent. Example: $100,000 x .035 = $3,500. The fee is calculated as follows: 1. Divide the base loan amount by .965 and round to the nearest cent. 2. Multiply that number by .035 (3.50%) and round to the nearest cent. Example: $100,000 ÷ .965 = $103,626.943005 (rounded to $103,626.94). $103,626.94 x .035 = $3,626.9429 (rounded to $3,626.94). Rate and Term Refinances Multiply the loan amount by 1.00%. Example: $100,000 x .01 = $1,000. Follow steps 1 and 2 above, substituting 99 for .965 and .01 for .035. Example: $100,000 ÷ .99 = $101,010.10. $101,010.10 x .01 = $1,010.10.

Secondary financing may be used if it is approved by RHS and is offered by city or county agencies. SECONDARY FINANCING

Refinance transactions must comply with the following requirements: REFINANCE REQUIREMENTS • The interest rate cannot exceed the interest rate of the existing loan. • The loan security must include the same property as the original loan. The security property must be owner-occupied as the borrower’s primary residence. • 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, such as late fees due the servicer, cannot be included in the new loan amount. • Any existing secondary financing must be subordinate to the first lien. • Cash-out is not allowed. • HUD-1 cannot reflect cash back to the borrower except for items prepared by the borrower outside of closing.

PROGRAM DESCRIPTION

The rural Housing Service (RHS) program provides very-low-, low- and moderate-income rural resident with better access to affordable housing finance options with little or no down payment or out-of-pocket costs.

Borrowers may obtain a loan to purchase a new or existing home that is located in a designated rural area. A rural community generally has a population of 10,000 or less; however, a community with a population of 20,000 or less can be considered “rural” if it is located outside a metropolitan statistical area (MSA).

To be eligible for RHS assistance, borrowers must lack sufficient resources (for example, borrower is unable to secure the necessary down payment which is generally 20%, to obtain conventional financing without RHS guarantee assistance). Guidelines for the program follow.

AVAILABLE PRODUCTS AND TERMS

30 year fixed rate

LOAN PURPOSE

Purchase

• Rate term refinance (only allowed when refinancing a current Rural Housing Guaranteed loan.)

OCCUPANCY

Owner occupied only

ELIGIBLE BORROWERS

Borrowers are subject to the following eligibility requirements:

• Borrowers may have only one residence. Borrowers may be the current owner of a structurally sound, functionally adequate house, as long as it is sold prior to or concurrently with the purchase of the new home.

• Borrowers must lack sufficient resources (for example, borrower is unable to secure the necessary down payment which is generally 20%, to obtain conventional financing without RHS guarantee assistance).

• Borrowers must have a valid Social Security Number.

• Borrower may be a permanent or non-permanent resident alien. Refer to the Underwriting Guide for details.

• Title must be in individual names only.

• All borrowers must be screened using CAIVRS (Credit Alert Interactive Voice Response System) to determine if an applicant is delinquent on a federal loan.

INELIGIBLE BORROWERS

Non-occupant co-borrowers

PREPAYMENT PENALTIES

Prepayment Penalty Option is not available.

MIN/MAX LOAN AMOUNT

The LTV is based on the appraised value. Minimum 80.01% LTV is required on all purchase transactions. The minimum loan amount is $30,000. Loan limits are dictated by the applicant’s income with respect to program eligibility and loan repayment ability. The maximum loan amount is 100% of the conforming loan limit or 103.5% when the Guarantee Fee is financed.

 Program Descriptions RHS Fixed Rate

2 6/15/2011

LTV/CLTV/HCLTV/FICO

The loan must meet the minimum FICO requirement listed in the following grids: Loans must be manually underwritten. Second Homes and Investment properties are not eligible.Primary Residence – Min Fico 640
Ranges  FICO 
Type  Units  *LTV  CLTV  HCLTV  Salaried  Self-Employed 
Purchase & Rate/Term Refinance  103.5%  100%  NA  640  640 
101%  100%  NA  640  640 

Kentucky USDA and Rural Housing Underwriting Update for November 2012

Kentucky USDA and Rural Housing Underwriting Update for November 2012

This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency. 

1)  Kentucky USDA loans and rural housing underwriting  is tightening up!  You are going to see us asking for more to make sure we have it to respond to USDA when they ask for it.  We don’t want to be caught shorthanded on these deals and be stuck waiting to get them closed (neither do you!) so to be reactive to the changes with USDA, you will find that we are conditioning for more than we used to.  To help us be on the ball with your USDA loans, be sure to include the following:

1)  30 days most recent paystubs showing a YTD amount

2)  VOE’s if the borrower is NOT employed in the same position for more than 2 years or the borrower has OT, Bonus or commission income.  We will recommend Written VOE’s   for the purpose of showing the borrower is in the same line of work!

3)  Assets – if your 1003 shows bank information and asset information then you must provide the most recent 2 statements to prove this information

4)  Collections & open judgments must show on your liabilities.  Please provide an LOX for all Derogatory credit  this LOX should show that the circumstances were temporary in  nature, beyond the applicant’s control and resolved to the best of their ability

5)  VOR‘s are required for all USDA loans.  USDA has been consistently requesting this information in the past 30 days.  For files above 640, a VOR will suffice.  For files under 640,     we will require 12 months cancelled checks.  If a VOR is not available due to the borrower living with family,  an LOX will be needed

6)  Paystubs for all income in the household regardless if they are on the loan or not. Must be most recent and 30 days worth to help determine actual income

7)  Garnishments or child support shown and if paying it we will require the court order. If receiving it, we need a 12 month history of receipt and court order

8)  W-2’s for the past 2 years for ALL jobs

9)  Tax returns if self employed or unreimbursed expenses are shown

10)  YTD P&L if self employed prepared by tax preparer and signed by borrower.

11)  1980-21 signed by borrowers

12)  Fully executed purchase contract

Remember – we cannot send a file to RD without an appraisal!!!  The appraisal must state that the property meets HUD Handbooks 4150.2 and 4905.1.

2)  Turn times for USDA in several states are extreme.  We understand your frustration with the delays and want to express to you that we are watching diligently for return commitments to push your files to closing.  If you could review your USDA loans with us and insure that all conditions are met….except for the CC…we can expedite these files ASAP when the commitment comes in.  If your file has been with us for over 30 days, please update the paystubs as ours will have expired!!!

Thank you for your attention and please let me know if you need me!

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*

Kentucky USDA and Rural Housing Credit Scores Guidelines

Kentucky USDA No Score Loan Guides

Map of Kentucky highlighting Jefferson County
Map of Kentucky highlighting Jefferson County (Photo credit: Wikipedia)

DTI: 29/41 Maximum no exceptions.
Rent: 12 months 0 x 30 on Rent. 12 months cancelled checks or VOR if institution. Or a four Non Traditional Trade Lines may be substituted with underwriting
approval.
Credit: No delinquent or derogatory past or current credit. Regardless of size or type.
No open collections or judgments (exceptions granted upon review only
and only based on overall profile of the loan).
Job Time: 2 years of consecutive work/education with no gaps.
Alternative Trades: 3 Non Traditional Trades with Rent or 4 Non Traditional Trades with No Rent. 0 x 30 and must have 12 month history on each trade.
Pricing: 3.00 negative adjustment to price.
Miscellaneous: Required to have 2 months bank statements and/or 401k asset Account with 2 month Reserves. FTHB Education is required.
Minimum Loan: $30,000
Residual Incomer per Family/Geographic: Borrowers must have residual income left over after their loan closes, see table below for what is required:
Family Size
1
$450
2
$755
3
909
4
1,025
5
1,062
Over 5 Add $80 for each additional family member up to 7

Kentucky Rural Housing and USDA 620-639 Credit Score Loan Guides:

DTI: 29/41 Maximum no exceptions.
Rent: 12 months 0 x 30 on Rent. 12 months cancelled checks or VOR if institution. Or a four Non Traditional Trade Lines may be substituted with underwriting
approval.
Credit: 3 Trade Lines seasoned for 12 months with high balances of a minimum $500. No delinquency in last 12 months regardless of size or type.
No open collections or judgments (exceptions granted upon review only and only based on overall profile of the loan)
Alternative Trades: May be needed if credit is thin or needed to be strengthened overall credit quality.
May require four non-traditional trades if no Rent History.
Job Time: 2 years of consecutive work/education with no gaps.
Pricing: 1.50 negative adjustments to pricing.
Miscellaneous: Required to have 2 months bank statements and/or 401k asset Account with 2
months reserves.
Minimum Loan: $30,000

Kentucky USDA and Rural Housing Manual Underwrite with GUS Refer Scores >=640:

DTI: 29/41 Maximum no exceptions.
Rent: 12 months 0 x 30 on Rent. 12 months cancelled checks or VOR if institution. OR a four Non Traditional Trade Lines may be substituted with underwriting
Approval if no rent history is available.
Credit: 3 Trade Lines seasoned for 12 months with high balances of a minimum $500.
OR if payment shock <=25% and traditional trade lines cannot be supplied we can accept 3 alternative trade lines with 12 month history and 0 x 30.
No delinquency in last 12 months regardless of size or type on any credit.
No open collections or judgments (exceptions granted upon review only and only based on overall profile of the loan)
Job Time: 2 years of consecutive work/education with no gaps.
Pricing: 2.00 negative adjustments to pricing.
Miscellaneous: Required to have 2 months bank statements and/or 401k asset Account with 2
months reserves. May be waived with strong compensating factors.
Minimum Loan: $30,000

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*