Tag: first time buyers

Kentucky Guaranteed Rural Housing Loans

To be eligible, applicants must:

• Have an adequate and dependable income;
• Be a U.S. Citizen, qualified alien, or be legally admitted to the United States for permanent residence;
• Have an adjusted annual household income that does not exceed the moderate income limit established for the area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household. Applicants may be eligible to make certain adjustments to gross income – such as annual child care expenses and $480 for each minor child – in order to qualify.USDA Rural Development field offices can provide information on the moderate income limits for the areas that fall within their jurisdiction, and can provide further guidance on calculating household income.
• Have a credit history that indicates a reasonable willingness to meet obligations as they become due;
• Have repayment ability based on the following ratios: Principle, Interest, Taxes, and Insurance (PITI) divided by gross monthly income must be equal to or less than 29 percent. Total debt divided by gross monthly income must be equal to, or less than, 41 percent.

A Kentucky USDA Guaranteed Loan is a Government Insured 100% Purchase Loan. These loans are only offered in rural areas.

Why choose a Kentucky USDA Mortgage?

• USDA Loans require no down payment.
• There are no prepayment penalties for USDA Rural Home Loans.
• A USDA Rural Development Loan has low monthly mortgage insurance.
• A USDA Rural Development Mortgage is available all rural areas of the country, provided a market exists for the property and the home meets HUD’s minimum property standards.
• A USDA Rural Housing Loan can be used to purchase a new or existing one family home in rural areas.
• USDA RD Loans are offered at terms of 30 years with a fixed interest rate.

  Kentucky USDA Loan FAQ’s

What is Considered a  Kentucky Rural Area by the USDA?

Rural areas include open country and places with population of 10,000 or less and—under certain conditions—towns and cities. There is an automated rural area eligibility calculator for USDA home loans at: http://eligibility.sc.egov.usda.gov.

What is the Maximum Loan Amount for a Kentucky USDA Loan?

There is no maximum loan amount for a USDA rural mortgage. However, it is limited by the appraised value and repayment ability (determined by your household income).

What is the Maximum LTV for a Kentucky USDA Loan?
The maximum USDA rural loan LTV can be up to 100% LTV plus the Agency guarantee fee.

Can Closing Costs be Financed into the Loan?
Yes, any difference between the contract price and the appraisal value can be used to finance normal closing costs for a Kentucky  USDA mortgage.

What is a Kentucky USDA Loan Guarantee?
USDA Rural Development Single Family Housing Program serves as a safety net for mortgage lenders. The USDA provides the full faith and assurance of the U.S. government that any financial loss resulting from servicing the loan will be reimbursed in full up to an amount not exceeding 90% of the original loan amount.

All loss up to an amount not exceeding 35% of the original loan is fully reimbursed. Any loss amount exceeding the 35% is 85% reimbursed. This leaves the lender only 15% exposed on the loss amount above the 35% of original loan.

In the majority of cases, the total loss does not exceed 35% of the original loan and the lenders are fully reimbursed. This guarantee provides lenders an expanded level of protection against losses. The quality of this guarantee allows lenders to easily sell the loans on the secondary market.