I am a Kentucky Mortgage Loan Officer that has successfully originated over 200 Rural Housing Mortgage Loans in Kentucky, Put my expert advice to use. This website is not affiliated with USDA or any other government agency. NMLS#57916 Equal Housing Lender Text or call today 502-905-3708 with your mortgage questions about USDA Rural Housing Loans in Kentucky. Free Pre-Approvals on most applications within the same day. Kentuckyloan@gmail.com
*Upfront guarantee fee will change from 2.75% to 1.0%
Annual fee will change from 0.50% to 0.35%
Kentucky USDA Loans are not just for small farm communities, but rather they can help many lower-income individuals or households purchase homes in many small cities, towns and townships!
Kentucky USDA Rural Development Guaranteed Lending Program is geared to assist low to moderate income families realize home ownership. Below are some important highlights:
Debt Ratios–29/41% on manual underwrites – max to 45% Debt to Income ratios with GUS Approve/Eligible Finding.
ZERO down payment – 100% LTV ok
Income Eligibility Limits do apply. Usually to $75k for a family of four and up to $98k for a household family of five or more.
Lender Credit from the interest rate may be used to pay closing costs.
Gifts ok! Usually not needed for USDA loans because 100% Financing offered. Gift funds cannot be used for reserves to get a GUS approval.
Applicants with > 20% of the sales price in assets (exclude retirement accounts) are not eligible for USDA financing.
Clear CAIVRS required – CAIVRS is a Federal Government-wide data base of information regarding individuals where an insurance claim or guarantee loss was paid.
2 tradelines with > 12 months of repayment history – installment or revolving and trade lines may be open, closed or paid in full by applicant.
Student Loan Payments – important recent change to Kentucky Mortgage RHS USDA Loans. The change no longer allows for student loan payments that are IBR (Income Based Repayment), graduated, adjustable, interest only and deferred. USDA now requires a payment equal to 1% of the balance reflected on the applicant’s credit report.
Kentucky Rural Development USDA Changes Coming soon below:
Kentucky USDA Streamlined-Assist refinances – similar to an FHA Kentucky Streamline…details coming soon!
Upfront Fee and the Annual Premiums will be reducing in the Fall of 2016 for a new Kentucky Rural Housing Mortgage Loans!
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). USDA Mortgage loans only offered in Kentucky.
All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.
KY USDA Up-Front Guarantee Fee Increase Effective October 1st, 2015
Any Kentucky RHS USDA loan that has not received conditional commitment from state Rural Development Offices in Lexington, KY by end of business on 9/30 will be subject to the 2.75% up-front guarantee fee increase.
Kentucky USDA Guaranteed Rural Housing Loans are one of the only “no money down” options available to home buyers today. USDA loans aren’t just in the country. Many other areas fall within the Kentucky USDA Rural Housing designated areas, so opportunities may be closer than you think. To view eligible rural areas near you, CLICK HERE to access the USDA lookup tool on their website.
This program is very attractive to low-to-moderate income buyers:
Kentucky USDA Guaranteed Rural Housing LoansDid you know that Kentucky home buyers can still get a mortgage with no money down, even with less than perfect credit? The Kentucky Guaranteed Rural Housing Loan Program offers these options in a wide range of areas, including many suburbs outside the major metro areas of Louisville, Lexington, Bowling Green, Owensboro, Paducah, Hopkinsville, and Northern Kentucky cities of Florence, Covington and Newport.This loan program is offered through the Kentucky Rural Housing Service, an agency of the U.S. Department of Agriculture and designed to assist low and moderate-income residents by providing better access to affordable housing finance options including little or no out-of-pocket costs in eligible areas.
Available to low- and moderate-income borrowers whose adjusted income is equal to or less than 115% of the area median income
Owner-occupied single family non-farm residences, approved condos and PUDs
New construction properties are eligible
Home buyers can finance up to 100% of the market appraised value, including all recurring and non-recurring closing costs, in some circumstances Loan amounts as high as $417,000 in the continental U.S. Higher in Alaska and Hawaii.
No foreclosures in last 3 years. Can be a previous homeowner
No bankruptcies in last 3 years for A chapter 7. Chapter 13 are usually okay with 12 months history.
Credit scores as low as 620 No asset or reserve requirements. Gift funds are allowed
One borrower must have 3 tradelines that have existed for 12 months. If this requirement cannot be met, an accept decision must be downgraded to a refer and treated as a manual underwrite.
VERIFICATION OF RENT:
Scores 680 and above OR GUS accept = No VOR required.
Scores 679 and below = VOR required.
COLLECTIONS:
Determine if the total outstanding balance of all collections accounts and charge offs of all applicants is equal to or greater than $2,000. Unless excluded by state law, collection accounts and charge offs of a non-purchasing spouse in a community property state are included in the cumulative balance of all collections and charge offs.
Remove all medical collections and medical charge off accounts from the total balance. Medical collections and medical charge off accounts must be clearly identifiable on the credit report.
If the remaining outstanding balance of collection accounts and charge offs are equal to or greater than $2,000, any of the following actions will apply:
Payment in full of all collection accounts and charge offs at or prior to closing.
Payment arrangements are made with each creditor for each collection account and charge offs remaining outstanding. A letter from the creditor or evidence on the credit report is required to validate the payment arrangements. The agreed upon monthly payment for each outstanding collection account and charge off will be included in the borrower’s debt-to-income ratio.
In the absence of a payment arrangement, the lender will utilize in the debt-to-income ratio a calculated monthly payment. For each collection and charge off utilize 5% of the outstanding balance to represent the monthly payment.
Criteria for USDA loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for three years or more, you are eligible to apply for an USDA mortgage. If you are in a Chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make an Kentucky USDA loan application.
RHS Increase in Annual Fee for Rural Housing Mortgage Loans in Kentucky
Kentucky USDA Mortgage Lenders must underwrite the loan using an annual fee of .5 percent and resubmit the application to RD in GUS after October 1, 2014
On Wednesday, October 1, 2014, the annual fee for both purchase and refinance loans will increase from .4 percent to .5 percent. The Guaranteed Underwriting System (GUS) has been updated to allow lenders to select and underwrite at either the .4 percent or .5 percent annual fee structure. Lenders should communicate with Rural Development (RD) offices to understand current processing time-frames.
GUS “Final Submissions” with an annual fee of .4 percent, that areissued a conditional commitment by RD prior to the close of business on Tuesday, September 30, 2014, will not be affected by the annual fee change. Those submissions that are not issued a conditional commitment by RD prior to the close of business on Tuesday, September 30, will be affected by the annual fee change.
Lenders must underwrite the loan using an annual fee of .5 percent and resubmit the application to RD in GUS.
USDA Home Loans : 100% Financing Kentucky USDA Rural Development Housing Zero Down Kentucky USDA Mortgage Loans Kentucky Single Family Housing Guaranteed Loan Program
The program’s full name is the Kentucky USDA Rural Development Guaranteed Housing Loan program. Most people call them “USDA loans” or “Rural Housing Loans.” Kentucky USDA loans are insured by the U.S. Department of Agriculture and the program’s most popular feature is its option for “no money down” financing. Via the USDA, you can finance 100% of a home’s purchase price.
It is a common misconception that these loans are only for farm types of properties. In fact, income producing farms are not eligible for the program. 118 of Kentucky’s 120 counties contain areas that are eligible for program (The whole area of Jefferson & Fayette Counties currently are ineligible). Parts of Bullitt County, McCracken, Christian, Boone, Kenton, Campbell Counties are ineligible.
The property cannot be located within the city limits of a municipality with a population level determined by the U.S Census with a limit set by the USDA.
A Kentucky USDA loans are similar to other loan types including loans via Fannie Mae and Freddie Mac. Kentucky USDA loans differ in their down payment requirements (none required) and its simpler loan approval standards. Kentucky Rural loans can be used by first-time buyers and repeat home buyers alike. Homeowner counseling is not required to use the Kentucky USDA program. Mortgage insurance premiums are also often more attractive than many alternative financing types.
Since October 1, 2012, USDA mortgage insurance rates have been : •For purchases, 2.00% of loan amount upfront fee paid at closing •For refinances, 2.00% of loan amount upfront fee paid at closing •For all loans, 0.40% annual fee, based on the remaining principal balance
As a real-life example, then, a homebuyer with a $100,000 loan size in Kentucky would be asked make a $2,000 upfront mortgage insurance premium payment at closing, plus $33.33 in mortgage insurance monthly.
The upfront mortgage insurance is not required to be paid as cash and the amount is often added to your loan balance even above the purchase price and appraised value of the home. USDA is one of the only loan types that allows you to also finance in other closing costs and prepaid items above the purchase price up the appraised value if it is greater than the purchase price of the home.
Also similar to the FHA, the USDA requires mortgage insurance premiums to be paid until the loan is paid-in-full, or until the home is sold. USDA mortgage insurance rates are lower than those for a comparable FHA mortgages.assess a 1.75% upfront mortgage insurance premium and charge as much as 1.55% in MIP annually.
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For home buyers today, there are two mortgage programs which offer 100% financing. The first is the VA loan from the Department of Veterans Affairs. It’s available to most active military personnel and veterans nationwide.
The other program is the U.S. Department of Agriculture’s Rural Development Single Family Housing Loan Guarantee Program.
Sometimes called a “Rural Housing Loan” or a “Section 502” loan, today’s USDA financing isn’t just for farms. Because of the way the USDA defines “rural”, there are plenty of exurban and suburban neighborhoods nationwide in which USDA loans can be used.
Home buyers who buy a home in a qualified USDA area, and who meet USDA income eligibility requirements, can take advantage of the USDA’s low interest rate, no downpayment mortgage program..
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