Tag: Elizabethtown Kentucky

Rural Housing Requirements For USDA Loans In Kentucky


Kentucky Rural  Housing Loans

 

Kentucky USDA loans are mortgages made by lenders and guaranteed by the U.S. Department of Agriculture. They are available to moderate- and low-income borrowers to build, rehabilitate, improve or relocate a primary residence in eligible rural and suburban areas. The income limit is 115 percent of the median income in your area. You can check the income limits for your area here.

 

It can be closed with zero down. USDA loans do have a monthly insurance requirement, but the upfront fee is significantly lower than on the VA loan and the mortgage premiums are lower than on the FHA loan.

The problem is that the number of buyers who qualify for a USDA loan is much smaller. Unlike on other loans where more income is better, a USDA loan has strict income maximums.

Fees for Kentucky USDA Loans

USDA loan borrowers pay an upfront fee of 1 percent of the loan amount, and this fee can be added to the loan balance. Borrowers also pay a mortgage insurance premium of 0.35 percent of the loan balance per year in 12 equal installments. This fee is based on the current balance and added to the monthly payment.

 

Down Payment Requirements for Kentucky USDA Loans

 

USDA loans are available with up to 100 percent financing (zero down).

 

Credit Score Required for Kentucky Rural Housing Loans

 

There is no minimum credit score for a USDA loan, but you are automatically ineligible if you are presently delinquent on a nontax federal debt.

Automated approval is available if you have two tradelines reported on your credit history and acredit score of 640 or higher.

If you do not have sufficient credit data, the underwriter can assess your creditworthiness other ways, such as by examining your history with rent payments. Applicants with a credit score lower than 640 will undergo additional underwriting steps.

 

Loan Limits for Kentucky USDA Loans

 

They are no loan limits for Kentucky USDA loans backed-up the guarantee loan program. The Direct USDA loan program does have loan limits.

Why Would a Seller Agree to a Seller Credit? Seller Benefits: ~ Seller credits help a home sell faster in buyer markets. Price Reductions are costlier to a seller than credits. ~ Innovative “Good Will” to support a new homeowner adjusting to homeownership. When the housing market turns into a buyer’s market, selling a home can be quite competitive. The seller is no longer expecting to receive 100% or more of their asking price and instead expects to take less than their asking price to sell their property. Therefore, they may offer a credit to attract more people to buy their home. After all, the seller is only concerned about selling their home at a reasonable price and selling it as quickly as possible. Seller credits and concessions are a very popular tactic to give the perception that buying their home is better. Seller credits work because many first-time buyers struggle to come up with the down payment and closing costs, and seller credits ease that burden. Buyer Benefits: ~ Allows the buyer to ease into homeownership by paying below fixed-rate payments. ~ Does not increase the loan amount. The loan amount amortizes as a standard fixed-rate loan. ~ Safe way to take advantage of a lower payment in a rising rate environment. A Seller Credit Can: = Offset closing costs = Permanentlv Reduce an interest rate = Temporarily Reduce an interest rate In all three scenarios, this helps your buyers. Each buyer has different needs, so it is up to you to help them In all three scenarios, this helps your buyers. Each buyer has different needs, so it is up to you to help them figure out how to best apply a seller credit.



 
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/
 
— 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 Home Loan Program Zero Down


KENTUCKY USDA LOANS

PROGRAM FEATURES

620+ MIN FICO– REFERS AND GUS ACCEPTS!

  • 620+ – YES WE DO REFERS!(29/41 MAX RATIOS)U/W DIRECTLY TO RD MANUAL GUIDES
  • 620+ GUS ACCEPTS – NO OVERLAYS – follow GUS findings
  • 101% LTV of appraised value
  • Ratios to 32/44 w/ 620+ and GUS approval w/ comp. factors for debt waiver
  • 35% Annual Fee, 1% Guarantee Fee
  • We Accept Transfer Appraisals – No Problem on all loans
  • File sent to RD within 24 Hours of UW clear!
  • File sent to docs within 24 Hours of Receipt of the RD commitment
  • Up to 6% seller concessions allowed
  • 620+ – GUS Accept – must have 2 trades for 12 months(open/closed) – or manual downgrade

GUS REFERS

  • 620– scores OK!
  • 29/41 max ratios
  • VOR or 12 months cancelled rents checks required
  • Tradelines or alt tradelines required
  • Medical collections & charge off accounts ignored – consumer collections follow HUD $2000 guidelines (Call us for details!)
  • Minimal lates allowed in past 12 months

KENTUCKY USDA RURAL DEVELOPMENT HOME LOAN


​ HOME LOAN BASICS

  • NO DOWN PAYMENT REQUIRED
  • Closing costs can be financed into the loan
  • Minimal credit score requirements – NO minimum score
  • Low monthly mortgage insurance
  • Home must be located in an eligible area
  • Home must meet property eligibility requirements
  • Fill out worksheet to get additional information about qualifying
  • Must be a regular stick-built home
  • Single Close Construction Program available
  • USDA to USDA Streamline Refinances available

SFH Direct Loan and Grant Programs

February 7, 2022

Fee Increases for Origination Appraisals and Conditional Commitments

An Unnumbered Letter (UL) dated February 4, 2022, has been issued which increases the appraisal fee to $750 and the conditional commitment fee to $825 under the direct programs.  The fee increases are effective March 6, 2022.  The increased fees reflect market price increases for origination appraisals in rural areas and the average cost of appraisals under the programs’ nationwide contract with the Appraisal Management Companies.

Rural Development staff will follow the implementation responsibilities outlined in the UL, which has been posted to https://www.rd.usda.gov/resources/directives/unnumbered-letters under Housing Programs (or click here for a direct link). 

No Money Down Kentucky USDA Rural Loan Program


How USDA Government  Underwriters calculate your Debt-to-Income or DTI ratio.

One of the most frequent questions that come from perspectives Kentucky  home buyers is

“How Much House Can I Afford?”

Answering this question is determined based on calculating what are known as the borrower’s Debt-to-Income or DTI ratios. The established standard DTI ratio used for a USDA Loan is based on two sets of ratios, which are as follows:

  • Front-end or housing ratio – the monthly mortgage payment cannot exceed 29% of the gross monthly income.
  • Back-end or total debt ratio – the total debts, including the new monthly mortgage payment, cannot exceed 41% of the gross monthly income.

A monthly mortgage payment includes the principal and interest payment on the mortgage note, as well as the monthly pro-rated portion of the annual fee, property tax and homeowner insurance premium.

 

Specific to the USDA Rural Loan program is the pro-rate portion of the USDA Annual Fee, which is often referred to as a monthly mortgage insurance payment. If there are any Condominium or Homeowner Association (HOA) fees, these fees must be included in the monthly mortgage payment as well.

Total debts include the anticipated monthly mortgage payment and all monthly re-occurring credit obligations.

 

Examples of reoccurring credit obligations include monthly car payments, minimum payment on credit cards, and student loan payments. If the borrower is obligated to make any alimony or child support payments, these payments will be included within the total debt calculations as well.

If the total debts exceed 41% of the gross monthly income, the maximum monthly mortgage payment must be reduced in order to bring total DTI back down to 41%. For example, assume a monthly income of $5,000.

 

Based on the 29%/41% ratio requirements, the maximum housing expense will be $1,450 and total debts will be $2,050. If the non-housing expense exceeds $600 ($2,050 – $1,450), the housing expense will need to be reduced by an equal amount to keep the total ratio at 41%.

While the 29%/41% ratio is considered to be the Underwriting standard guideline, the USDA Loan Program will allow for DTI ratios as high as 33.99%/45.99%.

 

What determines the ability to qualify at a higher ratio is a combination of factors, such as an approval through Guaranteed Underwriting System, which is USDA’s automated approval, and other compensating factors such as:

  • 680 or higher credit score
  • No or low “payment shock” – less than a 100% increase in proposed mortgage payment vs. current rental housing expenses
  • Fiscally sound use of credit
  • Ability to accumulate savings
  • Stable employment history with 2 or more years in current position or continuous employment history with no job gaps
  • Cash reserves available for use after settlement
  • Career advancement as indicated by job training or additional education in the applicant’s profession
  • Trailing spouse income – as a result of a job transfer, in which the house is being purchased, prior to the secondary wage-earner obtaining employment. This assumes that the secondary wage-earner has an established history of employment and has a reasonable chance to obtain new employment in the area upon relocating to the area
  • Low total debt load

Joel Lobb (NMLS#57916)
Senior  Loan Officer

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223Company ID #1364 | MB73346

Text/call 502-905-3708
kentuckyloan@gmail.com

http://www.nmlsconsumeraccess.org/
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/

When qualifying for a USDA Loan and the borrower already owns another house?


The USDA Loan assumes a very conservative perspective on financing homeowners who already own a home, unless the borrower can prove that the current home is not “adequate or suitable” for the borrower’s needs. Owning a house can be defined as not only being on the mortgage loan but also being on title to the property without being on the mortgage loan for that property. Factors that can determine when a house is not “adequate or suitable” include the following:

  • Household size change in which the borrower’s family size now exceeds the room count of the current house. The assumption being made here is that there is more than 1.5 household residents per room. The room count generally includes a living room, dining room, kitchen, recreation room, and bedroom(s). Room counts do not include bathrooms, hallways, or foyers.
  • In the case of divorce where the borrower remains on the mortgage loan, but the Courts have awarded the house to the ex-spouse.
  • Job transfer in which the borrower has relocated more than 50 miles away from the current residence.
  • Manufactured houses (i.e. doublewides) not on a permanent foundation.
  • The current house is not suitable due to documentable health and safety related issue, which includes the disability or limited mobility of a household resident that cannot be accommodated without substantial retrofitting of the current house.

Under no circumstances will the borrower be able to obtain another USDA Loan if the existing home is already financed using a USDA Loan. When qualifying for a USDA Loan and the borrower already owns another house, the costs associated with the current house, including the mortgage payment, property taxes, homeowner insurance, condo or Homeowner Association Fees, and lot rent in the case of a manufactured home, will be considered a liability to the borrower when calculating their debt-to-income ratio.

If the borrower has two years of rental history, as documented on their tax returns, the mortgage liability can be offset by the rental income. Also, in the case of a court ordered divorce settlement where the borrower can document 12 months of on-time mortgage payments being made by their ex-spouse, the liability can be excluded.

 

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
 
American Mortgage Solutions, Inc.
 
Text/call:      502-905-3708
fax:            502-327-9119
email:          kentuckyloan@gmail.com