Tag: jefferson county

Kentucky USDA RHS Rural Housing Mortgage Loans for 2013

Kentucky USDA RHS Rural Housing Mortgage Loans for 2013

Kentucky USDA Rural Program Guidelines

Borrower Eligibility
U.S. citizens
Permanent resident aliens
First time homebuyers allowed
Maximum 2 borrowers allowed
Non-occupant co-borrowers NOT allowed
Commitment Fee
USDA Rural Developmet charges a 2% Commitment Fee
Commitment Fee can be financed into the loan
Example:
Purchase price – $100,000
Loan amount – $102,040
Commitment Fee – $2,040
Maximum financed loan amount = $102,040 ($100,000 [purchase price]/.98)

This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA

Downpayment Requirement
No down payment is required
If borrower has adequate assets (i.e. 20% of the property purchase price) to obtain conventional financing the borrower may be ineligible for the USDA Rural Development Loan
Eligible Properties
Must be in an eligible Kentucky USDA Rural Development Location
Owner-occupied properties
Existing attached & detached single family residences
New construction with permanent financing only
PUD’s (i.e. Townhomes)
Condo-units. HUD, VA, FNMA or FHLMC approved project
Ineligible Properties
Co-ops
Mixed-use
Condotels
Manufactured homes
Log cabin homes
Single Family Homes where the Land value exceeds 30% of the appraised value AND can be sub divided.
Maximum Income Amount
County specific. Reference the USDA website for adjusted household income limits
Maximum Loan-To-Value
Maximum loan-to-value is 102%
Maximum Mortgage Amount
None
Minimum Credit Score
Middle Credit Score – 640 for each applicant for GUS automated underwriting approval
Monthly Mortgage Insurance Premium (MIP) Requirements
.40 basis points  USDA Loan require a monthly mortgage insurance premium. For example on a $100,000.00 it would be $33.33 a month
Multiple Property Ownership
Kentucky USDA Rural Development often won’t allow applicants to own other properties
Exceptions include when the other property owned is:
Not owned in the local commuting area as the new property; or
Not structurally sound and/or functionally adequate
Manufactured home not on permanent foundation

This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA

Occupancy Type
Owner occupied only
Qualifying Ratios
29/41% debt-to-income (DTI) – Target
Higher dti allowed on Gus Approvals or With 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 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 applicants profession
Trailing spouse income – as a result of a job transfer, the house is being purchased, prior to the secondary wage-earner obtaining employment. If the secondary wage-earner has an established history of employment and has a reasonable chance to obtain new employment in the area
Low total debt
Seller Contribution
Unlimited Contribution towards closing costs, prepaids, discount points, buydown fees, and upfront Commitment Fee
Transaction Types
Purchase
Rate/Term Refinance on existing USDA loan

This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA

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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. 

Kentucky Appraisal and Property Requirements for a USDA Guaranteed Rural Housing Loan in Ky

 Kentucky Appraisal and Home Requirements for a USDA Guaranteed Rural Housing Loan

Dwelling Requirements

 

USDA Rural Development for Kentucky homes  regulations contain very few restrictions on the type, size, style, and age of the homes that can be financed.

You as a Kentucky homebuyer have a responsibility to insure the home you wish to purchase or build will adequately meet your family needs. You must consider the size, age, overall condition, and ownership cost in making your decision. Cost of ownership increases with the size and age of the dwelling. The mortgage payment should not be your only factor in determining cost. If you are unsure of your ability to assess the home, seek assistance from someone with experience in these matters. Do not sign a purchase contract until you have investigated the home and are sure you wish to purchase and live in it.

Rural Development finances the purchase, construction and/or repair of single family dwellings and condominiums. Dwelling must provide decent, safe and sanitary housing and be in good overall repair. Loans cannot exceed the market value by more than the cost of the Rural Development appraisal, initial escrow fee and deposit. The following requirements are not all-inclusive but represent areas most commonly questioned:

 

Dwelling site

  • Located in a eligible rural community
  • Minimum size that cannot be subdivided into an additional site under existing zoning requirements
  • Contiguous to and have direct access from an all weather road developed in compliance with public body requirements and is dedicated for public use and maintained by a public body or homeowners association that has clearly demonstrated ability to maintain the street(s)
  • Capable of providing an adequate water and wastewater disposal system
  • Property located in a 100 year flood hazard zone area may not be eligible for financing.

Purchase of existing dwellings

  • The greater of the market value or purchase price cannot exceed the Rural Development loan limit for the respective area.
  • In ground swimming pools are not eligible
  • Structures such as barns and outbuildings designed for income production are not eligible
  • Must meet Rural Development thermal performance standards of minimum R rating of 38 in attic and 19 in basement ceilings over unheated space and have functional storm windows and doors
  • Must be structurally sound, functionally adequate for the family and in good repair or be repaired with loan funds. Certification from a disinterested third party inspector such as a home inspection service or qualified tradesmen is required for:
  • Structural soundness, electrical, heating, plumbing and roof cover
  • Water test required for private water system
  • Statement or certification on the functional adequacy of private wastewater disposal system from a qualified source such as a contractor who has completed an inspection during a pump out or by a local health organization
  • Certification that the home is free of termites or other wood damaging pests
  • Property located in a 100 year flood hazard zone may not be eligible for financing.
  • A loan may be made on an existing condominium in a project approved by HUD, Fannie Mae or Freddie Mac. Evidence of approval could be documented sales financed by these entities in the project. Condominium documents and association bylaws must be approved by Kentucky Rural Development’s counsel prior to approval.

Home inspections and certifications may indicate the need for repairs. Rural Development will request the applicant obtain estimates for the repairs. The cost of the repair must be considered in determining the final loan amount. Repair funds may decrease the loan available for purchase of the home. Funds needed for repair must be placed in escrow at closing and are released upon satisfactory completion and inspection by Rural Development.

Items needed by Rural Development to further processs the loan and complete an appraisal

  • Signed copy (both buyer and seller) of purchase contract (P&S) – faxes must be followed up with mailed, acceptable copy
  • Legal description
  • Directions to the property
  • Home inspection and other tests or certifications- optional at this time although early receipt of the information will expedite processing your request. Participation loan applicants should provide this documentation with the P&S.
  • Person to be contacted by Rural Development to schedule a preliminary evaluation of the subject property
  • Rural Development will generally visit and complete a preliminary evaluation of the subject property within 7 days of receipt of the above information. Loan approval will occur after estimates (if any) of repairs are reviewed and loan amount is established. This occurs generally within 35 days of receipt of the P&S subject to the availability of funds. Participation loans may take slightly longer.

    Construction of new dwellings

     

  • The greater of the market value, purchase price or total development cost cannot exceed the Rural Development loan limit for the respective area. 
  • In ground pools are prohibited
  • Must meet state and local building codes
  • Building permit required prior to closing of the loan
  • Minimum of the equivalent of an R-38 rating in all ceilings; R-19 in exterior walls and floors over unheated spaces; insulated windows with a storm or “low E’ rating and insulated exterior doors or doors with storms required
  • Owner construction not permitted. Construction must be the responsibility of a licensed contractor only operating under a single signed contract or by purchase of pre-approved completed dwelling.
  • Contract must be for a complete and finished home to include painting, finish grade, raking and lawn seeding
  • Bids for construction recommended
  • In most cases 40% of contract cost is held as retainage until home is substantially complete. Contractor must allow for this in the bidding process.
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    Items needed by Rural Development to further process the loan and complete the appraisal

  • Detailed plot plan and a survey
    • Specific floor plans (nothing generic) to include all floors, basement, porches, kitchen, and bath(s)
    • Exterior elevations – front, rear and side of dwelling
    • Detailed specific cross section from basement footings through the roof deck
    • Electrical, plumbing and heating plans
    • Form RD 1Kentucky Appraisal and Property Requirements for a USDA Guaranteed Rural Housing Loan in Ky924-2 “Description of Materials” completed by contractor and buyer
    • Kentucky Appraisal and Property Requirements for a USDA Guaranteed Rural Housing Loan in Ky

Louisville Ky Down Payment Assistance Mortgage Program

Louisville Ky Down Payment Assistance Mortgage Program.

via Louisville Ky Down Payment Assistance Mortgage Program.